Before I call the Secretary of State to make his statement, I have to express once again my disappointment that important announcements have been made first to the media, rather than to this House. In this case, I accept that issues of market sensitivity meant that announcements had to be made this morning. However, I am told that the announcements were required because of speculation about the policy change over the weekend. That speculation appears to have been substantially accurate, which means that the media appear to have known the details before this House did. If that is the case, I would be grateful if the Secretary of State could confirm that a leak inquiry is to be held.
With permission, Mr Speaker, I would like to update the House on building safety. Before I do so, I can confirm that I have asked the permanent secretary in my Department to conduct a leak inquiry. It was a matter of considerable regret to me that details of the statement that I am about to make were shared with the media before they were shared with Members of this House, and indeed with those most affected.
It is worth pausing at the start of any statement to reflect on why building safety is an issue of concern to all of us in this House today. It took the tragedy at Grenfell Tower on 14 June 2017, as a result of which 72 innocent men, women and children lost their lives, to put building safety properly on the political agenda. Families were living in a building that was literally a death trap because of failures of enforcement and compliance in our building safety regime. This Government must take their share of responsibility for those failures.
Over four years on from that terrible tragedy, it is clear that the building safety system remains broken. The problems that we have to fix have been identified by many across this House, from all parties. I would like at this point to register my appreciation of the work that the late Jack Dromey did on this issue. He was shadow Housing Minister for three years and he did a great deal, both as a trade unionist and as the Member of Parliament for Birmingham, Erdington, to bring to light the plight of those affected by this crisis.
As we know, there are still a small number of high-rise buildings with dangerous and unsafe cladding that have to be fixed. We know that those who manufacture dangerous products and develop dangerous buildings have faced inadequate accountability so far, and shown insufficient contrition. We also need to ensure that we take a proportionate approach in building assessments overall. There are too many buildings today that are declared unsafe, and there are too many who have been seeking to profit from the current crisis.
Most importantly, leaseholders are shouldering a desperately unfair burden. They are blameless, and it is morally wrong that they should be the ones asked to pay the price. I am clear about who should pay the price for remedying failures. It should be the industries that profited, as they caused the problem, and those who have continued to profit, as they make it worse.
Mr Speaker, we will take action on all of these fronts. To ensure that every remaining high-rise dangerous building has the necessary cladding remediation to make it safe, we will open up the next phase of the building safety fund early this year and focus relentlessly on making sure it is risk driven and delivered more quickly.
We will also ensure that those who profited, and continue to profit, from the sale of unsafe buildings and construction products must take full responsibility for their actions and pay to put things right. Those who knowingly put lives at risk should be held to account for their crimes, and those who are seeking to profit from the crisis by making it worse should be stopped from doing so.
May I thank you, Mr Speaker, for your kind words about Jack Dromey, who should have been with us here today? There is a space over there that I know Jack would have occupied. Back in the 1970s, horrified by the spectacle of a skyscraper in London that lay empty while people slept rough underneath it, Jack was one of those who occupied Centre Point tower in protest. He was never afraid to speak truth to power, and I hope that today marks the start of all of us across the House invoking his spirit.
Four and a half years after the appalling tragedy at Grenfell, and with a road paved with broken promises and false dawns, hundreds of thousands are still trapped in unsafe homes, millions are caught in the wider crisis, and the families of 72 people who lost their lives are waiting for justice. It is a relief that we finally have a consensus that the developers and manufacturers who profited from this appalling scandal should bear greater costs, not the victims, and that blameless leaseholders must not pay. After a year of hell of the prospect hanging over leaseholders, we welcome the decision to remove the threat of forced loans, but can the Secretary of State tell us what makes him think that he can force developers, who have refused to do the right thing for four years, to pay up? We have been told there is a March deadline and a roundtable, but there is not a plan. If he has one, can we hear it? He will find an open door on the Opposition side of the House, if he has a credible proposal to bring.
Today the Secretary of State warned developers that if negotiation fails,
“our backstop…what we can do…is increase taxation on those responsible”,
but that is not quite right, is it? I have in front of me the letter from the Chief Secretary to the Treasury. May I remind the Secretary of State what it says? He was told that
“you may use a high-level ‘threat’ of tax or legal solutions in discussions with developers”
I am grateful to the shadow Secretary of State for her questions. First, I entirely agree with the generous and fitting words that she had for Jack Dromey. As I mentioned briefly in my statement, he was a relentless campaigner for social justice throughout his career. Indeed, the role he played in highlighting the plight of the homeless, and the need to act in order to ensure that they had a safe and decent place to live, is one of the many achievements that we will all recall as we think of his contribution. I also welcome the consensual approach that the shadow Secretary of State and her Front-Bench colleagues are taking in seeking to ensure that we place responsibility where it truly lies, and she had a number of appropriate questions to follow up in order to ensure that we deliver effectively.
The shadow Secretary of State made the point that the allocations from the building safety fund so far have been slow and are behindhand, and that is true. I think it is always better to be honest about those areas where the Government have not performed as well as they should, and one of the first things I did as Secretary of State was to ask for all necessary steps to be taken to ensure that that money was spent effectively. Of course, one of the problems we have had is that it is a demand-led system, so we have relied on many of those who have been responsible as the individual owners of buildings to come forward. However, what we are also hoping to do is ensure that, working with the National Fire Chiefs Council, we have the most extensive analysis of all the buildings that need our support and that we accelerate work on the BSF. So her concerns are not misplaced, and it is certainly my intention to ensure that we accelerate and make comprehensive that work.
The shadow Secretary of State also made the point that non-cladding costs do need to be met, and I agree. She specifically requested that we provide amendments to the Building Safety Bill to ensure that there is statutory protection for leaseholders. That is our intention—we intend to bring forward those amendments—and I look forward to working with her and colleagues across the House to provide the most robust legal protection.
I will co-operate, Mr Speaker, and may I say, through you, to the Mother of the House, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), that the tributes to her husband Jack Dromey for his work on people’s interests at work and at home will be long remembered, together with that of David Amess, who for 20 years worked on the all-party group on fire safety and rescue with Ronnie King and others?
I believe that this is another step forward that is greatly welcomed and greatly needed, but I think the extension of the liability to 30 years is wrong for those who knew that what they were doing was wrong: 30 years may be fine for those who did it by mistake, but for those who knew what they were doing, there should be unlimited liability both in time and in money.
I hope that the Secretary of State will have a roundtable. If he wants to take over the all-party group roundtable for a summit on this, he can pick up some of the other issues that no doubt he has been working on, but which, to keep his statement reasonable, he may not have covered today.
One problem is the insurance premiums paid by leaseholders for a property they do not own, which may have gone up from an illustrative £300 a year to £3,000 a year. I believe that the Association of British Insurers should be told that the Competition and Markets Authority will look to see whether there is price gouging, in simple terms, and, that if there is some kind of catastrophic reinsurance needed, the Government should help them to make communal arrangements to deal with that, because insurance premiums should come down to the £300 they were before.
The last point of very many I would like to make is that the Treasury will expect to get the benefit of the levy and tax towards the £5 billion already announced, and the contributions that will come in from developers will relieve burdens on residential leaseholders, but the Government should also get the VAT on money that is spent, which is 20% of the total cost. If the total cost comes down from £15 billion to, say, £12 billion, my right hon. Friend can calculate and discuss with the Treasury how much extra the Treasury is getting. The Treasury should not be making a profit out of all this catastrophe.
I thank the Father of the House for his questions. He is quite right that Sir David Amess, before his sad death, was one of the most prescient and most effective campaigners for improved building safety. His memory is very much in my mind.
The Father of the House makes a point about the need to potentially look at unlimited liability for those who consciously and deliberately operated in a reckless fashion. I will consider that and I am sure it will be considered during the passage of the Bill. On his point that we should work with others, particularly the broad leasehold community who have done so much to identify the way forward, we absolutely intend to do that. The point he makes about insurance premiums is absolutely right. That is why my noble Friend Lord Greenhalgh will be talking to Baroness Morgan of Cotes and others in the Association of British Insurers to ensure that more insurers, like Aviva, do the right thing. I very much note his point about VAT and Treasury contributions. In the ongoing conversations we have with the Chancellor of the Exchequer, I will reflect on the very important point that he made.
I wish to echo the sentiments from across the House on the work Jack Dromey did on this issue and his campaigning to get justice for those affected.
It has been almost five years since the Grenfell fire. In that time, we have had four Housing Secretaries and several different policies and approaches to this issue. First the Government would pay, then leaseholders would pay and now developers will pay, all because the Treasury has for so long refused to act further on this issue. The confusion is not only harming homeowners facing a Tory cost of living crisis, but affecting the ability of devolved Governments to plan their responses appropriately. Can the Secretary of State guarantee that this latest policy will be acted on, and will he commit to working with the devolved Governments to provide further clarity? Additionally, can he make it clear when already promised funding will fully and finally be delivered to the devolved Governments for this matter?
I am very grateful to the hon. Lady for her points. We certainly will work with the devolved Governments. Of course, the residential property developer tax, like all UK-wide taxes, is distributed appropriately in line with the Barnett formula and other requirements, but we will certainly work with devolved Governments. I should say that I am very grateful to the Scottish Government, the Welsh Government and the Northern Ireland Executive for the work they have already done on this issue. We all have much to learn from one another.
I welcome the direction of travel in the statement, specifically that leaseholders will not have to pay for cladding remediation. I am also glad that building product makers are now coming within the scope of Government, not only property developers. I have been personally shocked by some of the revelations coming from the Grenfell inquiry and I think that potentially we need to address the building products sector. May I stress to my right hon. Friend that speed and delivery here is critical? It is now four and a half years since the tragedy in my constituency. What is important is not only having a good plan, but executing it quickly and efficiently.
My hon. Friend is absolutely right and I am very conscious of the need for speed. I quite agree. If we look at the behaviour of some of the cladding firms, the behaviour of people who work for Kingspan and Arconic, and the evidence presented to the Grenfell inquiry, we see that it is truly dreadful. The individuals concerned must take responsibility. She represents a constituency in which there are many, many people who are effectively trapped because of the failure of the property market to effectively address all these problems. In the interests of her constituents and so many more, and in particular in the interests of the Grenfell community and its fight for justice, I am very conscious of the need to move as fast as we possibly can.
I thank the Secretary of State for his statement. I am sure he will welcome an invitation from the Select Committee to come and discuss these matters further in detail. Just two important issues. First, will he clarify that leaseholders will not have to pay the cost of remediation, including non-cladding work, because that is not exactly what his statement says? Secondly, will he clarify that, apart from the removal of aluminium composite material cladding, the Government will give social housing providers no help whatsoever? If developers do not pay for the measures that he announced today or taxes are not raised, and there are cuts to his budget as a result, will that come off social housing provision as well? What assessment has he done of the total impact on the future building of social housing?
These are three very important points. First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe. Secondly, to ensure that there is not an adverse impact on social housing or on the work that Homes England is leading to bring together and remediate brownfield land for new private-sector development, we will do absolutely everything possible so that, ultimately, those with big balance sheets and big bucks discharge their responsibility. He and I will know that the seven major housing developers do much good work but that in the last three years they made profits of £16 billion. Understandably, people are prompted to ask that those significant sums be devoted to ensuring that the building safety crisis is met, alongside the building supply pipeline of the future.
I welcome these further measures to provide critical support to leaseholders and to restore a greater degree of confidence to the housing market. In particular, may I welcome the future support for those in medium-rise buildings? It is a pity that the Treasury did not agree to that proposal in January of last year, but such is the way with this issue. May I ask my right hon. Friend about two particular points? First, he has agreed a backstop with the Chief Secretary to the Treasury whereby the ultimate risk will be borne by the provision of social housing. I am sure that he would agree that it would be quite wrong for social housing tenants and the homeless to pay the price for solving this issue, so will he say that that will not be the case? Secondly, I see that the Royal Institution of Chartered Surveyors has failed to make good on the conversations we have been having for several months, if not years, to instil a more proportionate and sensible approach into the assignment of risk. What further steps—he alluded to some in his remarks—can he take against RICS, because its behaviour is now bordering on scandalous in not taking this issue seriously?
First, I pay tribute to my right hon. Friend, my predecessor. I have had the opportunity since joining the Department to see just how hard he worked, facing a number of frustrations, to secure justice for those who are our first concern. I heard some comments from some Opposition Members seeking to decry that. If they knew what I know about how hard Robert had worked to try to secure justice, they would not be trying to make a cheap point about it. We all care about this issue, but few care about it as much, and certainly no one currently in this Chamber has worked as hard to try to help those people, as my right hon. Friend. So I am not having it.
The second point that m right hon. Friend made is absolutely right; we need to ensure both that there is more social housing provision and that we improve the quality of social housing—that is a core mission for the Department. His third point, about RICS, is right. There have been all sorts of difficulties with that organisation in the past, but I am now hopeful that we are on a more positive footing. We have the potential to take steps to improve the governance of the institution, but I am hopeful now that, given some of the conversations we have had, including with lenders and others, we can be on a more positive footing. Let me once again underline and affirm my gratitude to my right hon. Friend for his incredibly hard and dedicated work to try to bring this situation to a satisfactory conclusion.
My constituents in Eclipse House, Station Road, Wood Green have been suffering for more than a year with astronomical costs to deal with gaps relating to fire doors and external wall insulation. Can the Minister confirm that that is not covered in today’s statement? Secondly, what voice will tenants have in the future? One of the worst things about Grenfell is the lack of tenant voice to make good things stick when bad practice is all around.
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Today, I am putting them on notice. To those who mis-sold dangerous products, such as cladding or insulation, to those who cut corners to save cash as they developed or refurbished people’s homes, and to those who sought to profiteer from the consequences of the Grenfell tragedy: we are coming for you. I have established a dedicated team in my Department to expose and pursue those responsible. We will begin by reviewing Government schemes and programmes to ensure that, in accordance with due process, there are commercial consequences for any company that is responsible for this crisis and refusing to help to fix it.
In line with this, just before Christmas, I instructed Homes England to suspend Rydon Homes, which is closely connected to the company that refurbished the Grenfell Tower, from its participation in the Help to Buy scheme, with immediate effect. I also welcome the decision by the Mercedes Formula 1 team and Toto Wolff to discontinue sponsorship from Kingspan, the cladding firm, with immediate effect. The voices of the families of the bereaved and the survivors of the Grenfell Tower were heard, but this is only the start of the action that must be taken.
We must also restore common sense to the assessment of building safety overall. The Government are clear—we must find ways for there to be fewer unnecessary surveys. Medium-rise buildings are safe, unless there is clear evidence to the contrary. There must be far greater use of sensible mitigations, such as sprinklers and fire alarms, in place of unnecessary and costly remediation work.
To achieve that, today I am withdrawing the Government’s consolidated advice note. It has been wrongly interpreted and has driven a cautious approach to building safety in buildings that are safe that goes beyond what we consider necessary. We are supporting new, proportionate guidance for assessors, developed by the British Standards Institution, which will be published this week.
Secondly, we will press ahead with the building safety fund, adapting it so that it is consistent with our proportionate approach. We will now set a higher expectation that developers must fix their own buildings, and we will give leaseholders more information at every stage of the process.
Thirdly, before Easter, we will be implementing our scheme to indemnify building assessors conducting external wall assessments, giving them the confidence to exercise their balanced professional judgment. We will audit those assessments to ensure that expensive remediation is being advised only where it is necessary to remove a threat to life.
I will be working closely with lenders over the coming months to improve market confidence, and I have asked my colleague Lord Greenhalgh to work with insurers on new industry-led approaches that bring down the premiums facing leaseholders.
Further, we will take the power to review the governance of the Royal Institution of Chartered Surveyors, to ensure that it is equipped properly to support a solution to this challenge. Those in the industry who refuse to work with us in good faith to take a more proportionate approach should be clear that our determination is to fix the problem for all those caught up in this crisis.
Finally, we must relieve the burden that has been unfairly placed on leaseholders. I want to pay tribute to all those across the House who have campaigned so passionately on this subject. They know the injustice of asking leaseholders, often young people who have saved hard and made sacrifices to take their first steps on the housing ladder, to pay money they do not have to fix a problem they did not cause, all while the firms who made a profit on those developments sit on their hands. We will take action to end the scandal and protect leaseholders. We will scrap the proposal for loans and long-term debt for medium-rise leaseholders.
I can confirm to the House today that no leaseholder living in a building above 11 metres will ever face any costs for fixing dangerous cladding and, working with Members of both Houses, we will pursue statutory protection for leaseholders and nothing will be off the table. As part of that, we will introduce immediate amendments to the Building Safety Bill to extend the right of leaseholders to challenge those who cause defects in premises for up to 30 years retrospectively.
We will also take further action immediately: we will provide an additional £27 million to fund more fire alarms, so we can end the dreadful misuse of waking watches; we will change grant funding guidance so that shared owners affected by the crisis can more easily sub-let their properties, and encourage lenders and landlords to approve sub-letting arrangements; and in the period before long-term arrangements are put in place, I will work with colleagues across Government to make sure that leaseholders are protected from forfeiture and eviction because of historic costs. Innocent leaseholders must not shoulder the burden.
We have already committed £5.1 billion of taxpayers’ funding from the Government, but we should not now look to the taxpayer for more funding. We should not ask hard-working taxpayers to pay more taxes to get developers and cladding companies making vast profits off the hook. We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders. Those who manufactured combustible cladding and insulation, many of whom have made vast profits even at the height of the pandemic, must pay now instead of leaseholders.
We have made a start through the residential property developer tax and the building safety levy, both announced last February, but will now go further. I will today write to developers to convene a meeting in the next few weeks, and I will report back to the House before Easter. We will give them the chance to do the right thing. I hope that they will take it. I can confirm to the House today that if they do not, we will impose a solution on them, if necessary, in law.
Finally, we must never be in this position again, so we are putting the recommendations of the Hackitt review on building safety in law and we will shortly commence the Fire Safety Act 2021. We are also today publishing new collaborative procurement guidance on removing the incentives for industry to cut corners and to help stop the prioritisation of cost over value. We will legislate to deliver broader reforms to the leasehold system, and also bring forward measures to fulfil commitments made in the social housing White Paper. When parliamentary time allows, we will have legislation on social housing regulation so that social housing tenants cannot be ignored as those in the Grenfell community were for many years.
Four and a half years on from the tragedy of Grenfell, it is long past time that we fix the crisis. Through the measures that I have set out today, we will seek redress for past wrongs and secure funds from developers and construction product manufacturers, and we will protect leaseholders today and fix the system for the future.
but
“whether or not to impose or raise taxes remains a decision for me”
—the Chief Secretary—
“and is not a given at this point.”
If I have seen the letter, I am fairly sure that the developers have too. Furthermore, it appears that what the Secretary of State has told the public—that tax rises are the backstop—is not what he has told the Treasury. The letter says that
“you have confirmed separately that DLUHC budgets are a backstop for funding these proposals in full…should sufficient funds not be raised from industry.”
That is not what the Secretary of State told the House a moment ago, so can he clear this up? Has the Chancellor agreed to back a new tax measure if negotiations fail, or is the Secretary of State prepared to see his already allocated budgets—levelling-up funding, or moneys for social or affordable housing—raided? Or is his plan to go back to the Treasury, renegotiate and legislate, if he fails in March? If that is the case, it will take months, and there is nothing to stop freeholders passing on the costs to leaseholders in the meantime. Does he even have an assessment of how many leaseholders will be hit with whacking great bills if he delays?
If the Secretary of State is serious about going after the developers—I hope that he is—why is he not putting these powers into the Building Safety Bill now? The only trick that he has up his sleeve, as he just confirmed to the House, is to ban them from Help to Buy, and we know that the impact of that, though welcome, will be marginal. Can he see the problem? He will also know that there is a gaping hole in what he has proposed. A significant number of buildings have both cladding and non-cladding defects, and leaseholders in them face ruinous costs to fix things such as missing fire breaks and defective compartmentation. One cannot make a building half safe. Given that the Secretary of State recognises the injustice of all leaseholders caught up in the building safety crisis, why is he abandoning those who have been hit with bills for non-cladding defects, and why will he not amend his Bill so that all leaseholders are protected from historical defects in law?
The truth is that the pace of remediation has been painfully slow. The Secretary of State is now on track to miss the deadline to fix all Grenfell-style cladding by over half a decade, and there are huge delays when it comes to building safety fund applications, so will he get a grip on what is going on in his own Department and ensure that the progress of remediation is accelerated markedly? As he knows, this has been a living nightmare for affected leaseholders, and we owe it to them to bring it swiftly to an end.
What the Secretary of State has given us today is a welcome shift in tone and some new measures that the Opposition very much hope will succeed, but the harder I look at this, the less it stands up. We were promised justice and we were promised change, to finally do right by the victims of this scandal, and that takes more than more promises. It takes a plan.
The shadow Secretary of State doubted—again, I can understand the basis of her scepticism—whether developers and others in industry, given their past behaviour, would necessarily come sweetly to the table, and that is why it is so important that we have a range of tools available. I think it is important to recognise that there are some developers and some in the industry who have done the right thing, and it is also important to recognise that a spokesman for the Home Builders Federation, Stewart Baseley, today struck a very a constructive and open tone.
However, we do need to have additional backstops, and it is clear that taxes can, if necessary, play a part. I do not want to move there, but we do have the absolute assurance that we can use the prospect of taxation to bring people to the table. All taxation decisions are made by the Chancellor, and no Chancellor or Chief Secretary would ever say anything other than that, but the fact that the Chief Secretary and the Chancellor have authorised me to use the prospect of taxation, and the fact that we already have taxation through the residential property developer tax, shows that we are prepared to take every step necessary.
The final point that was implicit—perhaps explicit—in everything the shadow Secretary of State said is that we will be judged on our actions, and I think that is entirely fair. I recognise, given the scale of the frustration that so many have felt in the past, that ultimately there can only really be satisfaction when we bring this matter to a conclusion. I believe that today marks a significant step forward, but there is more work to do, and I hope that we can conclude that work on a cross-party basis in order to bring justice to those who deserve it.