[Relevant documents: Seventh Report of the Housing, Communities and Local Government Committee, Session 2019-21, Cladding Remediation—Follow-up, HC 1249; Fifth Report of the Housing, Communities and Local Government Committee, Session 2019-21, Pre-legislative scrutiny of the Building Safety Bill, HC 466; and Second Report of the Housing, Communities and Local Government Committee, Session 2019-21, Cladding: progress of remediation, HC 172.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2022, for expenditure by the Ministry of Housing, Communities and Local Government:
(1) further resources, not exceeding £15,676,146,000 be authorised for use for current purposes as set out in HC 14 of Session 2021-22,
(2) further resources, not exceeding £2,820,587,000 be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £16,461,164,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Scott Mann.)
Before I call Clive Betts, the Chair of the Housing, Communities and Local Government Committee, to open the debate, let me inform the House that, as there are clearly a lot of Members who want to speak, there will be a five-minute time limit on speeches, which will be on the screens.
I thank the Backbench Business Committee for finding time for this important debate. I realise that the whole of the nation will be watching their television sets this afternoon, totally interested in the proceedings in the House on this important issue—but, seriously, four years on from Grenfell, the one thing that we should be able to agree on is that we should do everything necessary to ensure that a tragedy like Grenfell never happens again.
We have had the Hackitt review and the draft Building Safety Bill on which the Housing, Communities and Local Government Committee did pre-leg scrutiny, both of which are welcome steps forward. I will ask many questions this afternoon. I probably will not be able to put all of them on the record, but the Committee will write to the Minister afterwards and set out a list of questions in the public domain, if that is helpful. First, when will the Building Safety Bill in its final form be published? Can we have a timetable for that? Four years after Grenfell, thousands of families are still living in unsafe homes and facing bills they cannot afford. In many cases, their lives are put on hold because they cannot sell the homes they live in and move on. That puts enormous pressure on the mental health and wellbeing of those families.
The Committee has produced three reports about building safety and cladding issues, and I have with me the most recent one, “Cladding Remediation—Follow-up”, which we published in April. Because it is an estimates day, I will concentrate on resources and Government funding—or sometimes the lack of Government funding. Do the Government yet know how many homes are unsafe and what the estimates are to put them right? There is a second, general point that we have repeated over and over again in our reports. We ought to be absolutely clear that we establish
“the principle that leaseholders should not pay anything towards the cost of remediating historical building safety defects”
It is a pleasure to follow the Chair of the Select Committee, who is always thoughtful and well informed.
The Building Safety Bill will be a landmark piece of legislation. I would like to see it introduced as quickly as possible, post summer recess. It will transform the regulatory system for buildings and put the safety of residents in high-rises at the heart of the regime. It will make it clear who is accountable for the safety of buildings, all the way through their life, from design to construction and occupation. I would also like it to drive a change in the culture of the building industry, because I have been shocked by some of the revelations that have come out of the Grenfell inquiry, particularly about the conduct of the building products industry.
Given that this is an estimates debate, I want to welcome the funding that the Government have made available. Of the £5.1 billion, if we add the £3.5 billion announced in February to the £1.6 billion that had already been announced, and if we also include the subsidised loans scheme, the tax on property developers and the levy on high-rises, it looks to me like a package of £5 billion to £10 billion, and it could well be in the mid to upper end of that range. However, it is clear that there are still an awful lot of outstanding issues that we need to resolve with a sense of urgency.
First, leaseholders in intermediate-height buildings of 11 to 18 metres need clarity on the financing scheme, and they need it as soon as possible, because uncertainty is not good. I understand that the loan will go with the building, as opposed to the leaseholder, but sometimes the freeholds of these buildings are not worth a lot, so if the loan exceeds the value of the freehold, how will that work?
I have tremendous sympathy for the plight of leaseholders who are facing extenuating circumstances and who are in this position—let us never forget—through no fault of their own. Every time I talk to a constituent about a new building, it exposes another complex set of problems, so I beseech the Minister to get dedicated teams at the Ministry of Housing, Communities and Local Government drilling down into the detail, building by building, and trying to resolve some of these very difficult and complex issues.
My hon. Friend is making an outstanding case, and she clearly knows this subject from every angle. Does she agree that no matter how much money the Government allocate to this issue, unless it is combined with a resolution or rule that prevents leaseholders from being charged straightaway, there is little chance of leaseholders escaping the unfair financial punishments that she described so eloquently?
What I would like to see is a rigorous approach, building by building, so that we can come to solutions, because there is no question but that we need a sense of urgency and that the situation is taking a huge toll on leaseholders.
I am conscious of the time, so I will make a few other points. I am very conscious that we need to hire and train way more professionals—building assessors and fire assessors—who can get on with the work. Insurance is another huge issue. I have talked to constituents who have seen their insurance bills triple or go up fourfold. We have the template of a solution with Flood Re and the solution that we got to flood insurance. Let us be creative and see whether we can do something similar with high-rise buildings and fire risk. It is incumbent on the industry to take a balanced and sensible approach, however; in reality we will not be able to nullify every single risk. I have called previously in the Chamber for the Government to consider a tax on the building products industry in the same way as they have done on the property development sector, and I make that appeal again.
In summary, I welcome what the Government have done, but there is so much still to be done. It needs to be done with a sense of urgency, and we need to resolve these issues for buildings and leaseholders once and for all.
It is a pleasure to follow the Chair of a Select Committee, who has made some excellent points that I wholeheartedly endorse. I recognise many of the issues that the hon. Member for Kensington (Felicity Buchan) has just raised, because they affect my constituents too. It is really important to recognise that this is of course a UK-wide problem and that many of the regulations under which these buildings were built predate devolution, so even though some of the responsibilities now sit with the Welsh or Scottish Governments, this is a legacy of failure within the building and construction industry, in the way that leasehold operates, and on many other issues that we have discussed in the House on a number of occasions.
I have been contacted yet again in the past few weeks by residents in Cardiff South and Penarth. I have thousands of apartment units in my constituency. Let us recognise that this issue is not just about new builds; it is also about conversions. I have many old docks buildings in Cardiff Bay and docks communities that have been converted into apartments, and I have heard from residents in a number of those buildings who are affected in the same way as those in new builds. That is why I am somewhat disappointed by the approach that the UK Government have taken in not working constructively, as they could be doing and as they have done on some related issues, with the devolved Administrations, and with the Welsh Government in particular. I will come on to that again in a moment.
I just want to reiterate here that leaseholders should not have to pay for this. Obviously the primary responsibility lies with the developers and those who built these defective buildings. On the point made by my hon. Friend the Chair of the Housing, Communities and Local Government Committee, this is not just about fire safety. I have heard horror stories about flats that have been flooded with sewage because a foul water pipe, which was not even connected, was propped up behind a wall on a Starbucks cup. I have heard about sewage flooding into apartments, balconies that are not safe to go on, windows that are not safe to open, rendering that is not suitable for the maritime environment of the Cardiff Bay area falling off buildings on to cars, let alone the whole litany of fire safety issues relating to compartmentation, doors, fire alarm systems and, of course, cladding and insulation.
5:33 pm
Deidre Brock (Edinburgh North and Leith) (SNP)
The passage of time does not always heal wounds or lessen the pain and anger that people feel over wrongs done to them, to their loved ones, or even to their communities. Grenfell will not and should not be forgotten. The failure of Governments to ban the use of flammable cladding will be an issue that will echo for quite a while yet, and I hope that the Government now find that their conscience directs them to ensure that the people who have been adversely affected by that failure to properly regulate will be compensated adequately.
Stark, too, is the impression that profits have come before people. There have been reports that the less expensive cladding was used in some buildings in spite of concerns over its safety. I cannot quite decide whether the people making those decisions felt that fire was so unlikely that it was a risk worth taking so long as it was not their houses the stuff was going on, or they do not concern themselves all that much with possible future events in the buildings they are commissioning. This is perhaps one of the great divides in society and in politics —do you place people above profit or profit above people? Do you value people for the contribution they make to the economy or value the economy for the contribution it makes to society? I do not expect us all to find common ground in the near future, but we can at least agree that profits should not come at the expense of people’s health and wellbeing. Many of us have constituents who find themselves deeply affected by the shaking out of these issues—people who are finding it difficult to sell their flat, who need additional certification to get mortgage decisions in their favour, and who have found that some insurers are backing out of these properties or, alternatively, are demanding substantially increased premiums. I would be interested to hear from the Minister what discussions the team in the Department have been having with insurance companies on these matters.
There is a case to be made for people who find themselves stuck, through no fault of their own, being helped by Government and by the regulatory agencies. There is a case for the Government to provide moneys for the surveys needed to clear mortgage agreements and to provide the resources to clear the substandard cladding from buildings. It would also be good if those who decided that it was good business to install it were pursued to pay the penalty for it.
A good start from the perspective of good government would be to copy the example set in Scotland, where a programme of whole building inspections—it is being referred to as a single building assessment—is to be carried out, saving individual property owners the expense and worry of arranging their own inspections for an EWS1 clearance. That programme has been funded by the Scottish Government and the first phase is about to start. The safety assessments on buildings with flatted properties will provide the evidence needed of the extent of remedial works required. The programme covers low-rise as well as high-rise, and it will mean that people in whose properties no issues are revealed will be released from safety concerns and mortgage lending problems. The programme will then move on to remediation of the buildings in need, starting with those most at risk. It was not the Scottish Government who put these homeowners in this position—in fact, this cladding has been illegal in Scotland for some years—but the mark of good government is stepping up to solve a problem for people. I am at a loss to understand why there is not, or does not seem to be, a similar Government initiative in England.
I start by thanking all the builders who have continued to work on construction projects, including building safety measures, throughout the pandemic.
We need more homes in Stoke-on-Trent—affordable, safe and compliant with the strictest standards, as well as in the right places. I welcome the commitment of Staffordshire’s new police, fire and crime commissioner, Ben Adams, to develop and deliver a fire plan that addresses some of the urban challenges in Stoke-on-Trent. Sadly, those challenges include sunset landmark industrial heritage buildings, many left in a perilous, unsafe and sorry state. I hope that the heritage action zone partnership we have developed in Longton with the city council and Historic England will particularly help to address this and improve the condition of buildings in the town centre conservation area. I am particularly keen to see the redevelopment of the Crown works, a short walk from my constituency office in Longton, which are unfortunately in a very dangerous state. It is important to see new housing uses on the site, and I hope we can also preserve some of the most prominent historical features. I hope the levelling-up fund bid that we have put in to catalyse a safe and sympathetic redevelopment of town centre heritage sites such as that is successful.
Indeed, there are a number of such conversion schemes across Stoke-on-Trent, where we have opportunities to repurpose redundant industrial heritage sites that are currently in an unsafe condition and high street buildings to modern housing in historic settings. In addition, multiple hectares of brownfield sites need support to safely clean up the effects of past heavy industrial uses. We have the capacity to build without eating into the green belt or protected green spaces, and we have a strong track record locally, with 99% of new housing on brownfield sites in Stoke-on-Trent over the past year. This was particularly thanks to housing infrastructure funding, which has helped bring forward work on more challenging sites in in the north of the city.
5:44 pm
20 of 51 shown
for which they are not responsible. One of the questions we will probably ask—the second question—is: will the Minister confirm that that is still the Government’s policy? It has changed from time to time.
In recognising that significant funding has been made available by Government, let me go through the funds. On the £600 million funding to remove aluminium composite material cladding—the cladding that was on Grenfell—progress has been a little disappointing. Could the Minister explain, probably with an answer in writing at some point, when the removal of all ACM cladding will be finished and why there are still 33 buildings with ACM cladding where remediation work has not started?
The Select Committee was also at the forefront of pushing for funding to remove other forms of dangerous cladding. The first £1 billion building safety fund was clearly not adequate: it was on a first come, first served basis, which was not appropriate. It is therefore welcome that the fund is now £5 billion, but why are only buildings over 18 metres covered? What risk assessment has been done to determine that? Has an estimate been done of whether the extra £3.5 billion will be sufficient? Why is the £3.5 billion not so far covered in the estimates? Has the funding profile for that money and the years that it will be spent over now been agreed? If so, can we know what it is? Why have 2,000 registrations for the fund not progressed? Are the Government satisfied that those buildings are safe even though their claims on the fund, having been registered, have not moved any further forward?
Have we any further information on how the loan scheme for buildings between 11 and 18 metres will work? Ministers have been unable to explain any of it in previous discussions. They have said that neither leaseholders nor freeholders will be responsible for the debt for the loan, so who will be responsible? Have Ministers any idea what the total cost of the loan scheme will be? How many buildings will it cover? Do they accept that for some buildings it will mean a debt of several thousand pounds, running over many years, before the final costs are paid off?
Does the Minister accept that buildings under 11 metres, which are not covered by the building safety fund or the loan scheme, could still be at risk? How many such buildings are there? What risk assessment has been done on them?
Why has social housing been excluded from all the funds apart from the original ACM fund? Does the Minister accept the National Housing Federation’s figure that it could cost £10 billion for housing associations to put right building safety defects in their homes? If that is to be done without any Government support, do the Government accept that that money will come out of commitments that would otherwise have been made to build new homes or refurbish existing homes? What assessment have the Government done of the impact of not allowing social housing to claim against the building safety fund?
One of the biggest issues is that, apart from cladding removal, the building safety fund does not cover building safety defects. We know that there are faulty balconies, faulty fire doors, missing fire breaks and faulty insulation. Why have those issues been omitted from the fund? What risk assessment has been done of that? Do the Government accept that some leaseholders are facing bills of £50,000 to put right defects in their home other than cladding? Does the Minister accept that buildings that have claimed and received money from the building safety fund to put right cladding problems are being left with other defects that make their homes unsafe? In some cases, we are spending enormous sums of public money and the end result will still be homes that are not safe, because other defects remain that the leaseholders simply cannot afford to put right. Is that an acceptable situation?
Does the Minister accept the Select Committee’s proposal that we should now have a comprehensive building safety fund that covers all safety defects, not just cladding; all buildings, not just those above 18 metres or above 11 metres; and all tenures, including leasehold and social housing?
We believe that where individual developers, architects or contractors can be held accountable for defects in a particular building, they should be held accountable properly in law and made to pay. However, we know that those legal battles can go on for years and years, so essentially Government have to step in first to fund this work, putting the money into a comprehensive building safety fund, although we believe that industry in general should also pay. That includes the development industry, as well as suppliers of products, because often faulty products have been a cause of these problems.
We welcome the principle of a tax and a levy on the industry, which the Government have announced. That is a good step forward. To confirm, will the tax and levy produce money in addition to the £5 billion, or are they part of that, reducing the Government’s cost? Do we know when the money from the levy and the tax will start to arrive? Presumably the tax will need legislation, and perhaps the levy will as well. Is it true that a levy, if introduced, will be applied only when planning permission is granted? If so, it could be years down the road before a building on which the developers are due to pay the levy is actually built and the levy is handed over; we could be years away from getting any money. Will the Government confirm the likely timetable?
This issue will not go away until all homes are safe in this country. It is an issue that we will come back to as a Select Committee and, I suspect, that we will come back to over and over again in this House. This is a major challenge, and so far, bit by bit, the Government are moving steadily towards addressing it. All I would say to the Minister today is that, although progress has been made, there is still an awfully long way to go. I hope we will get a positive response from him to the recommendations in the Select Committee report. We will write to him further to list all the questions we would like answers to following the debate.
I also ask that there is some discretion. To give a quick example, there is a building in my constituency where the leaseholders paid for the remediation of ACM cladding in the expectation that the building’s owner would then apply to the fund. They have now been told that the building’s owner does not want to do that, but they find that they cannot apply to the fund because they are a third party. I would love to see discretion in that situation.
This is an extraordinary situation and the issues are very wide ranging. The situation in which residents find themselves is completely unacceptable. It is worth emphasising the mental health toll that it is taking on many of my constituents—those who have bought properties in good faith and then find themselves facing extraordinary bills while they have been going through the same difficulties that everybody in the country has been going through in the past year. Many of them face difficulties around their own jobs and incomes, and this has been an additional pressure on top of that.
First, I would like the Minister to speak to his colleagues in the Ministry of Housing, Communities and Local Government and in the Treasury to urge them to sit down with the Welsh Government and answer some of the very reasonable questions that are being put to the Department by the Minister for Housing and Local Government in Wales, Julie James. On 23 June, she had to write again to the Secretary of State to get some basic answers. Let me quote from the letter that she sent:
“In my previous correspondence, I raised the importance of joint working and meaningful engagement on this topic. I urgently requested details of the level and timing of consequential budget allocations, following the large announcements that the UK Government made about the Building Safety Fund.”
The Secretary of State had previously replied and said that the Barnett formula would apply in the usual way, yet the Welsh Government have not been able to get any details of the actual amounts of money, or when it would come through. The Housing Minister is rightly asking for the amount of consequential funding that Wales will receive from the additional amounts announced by the UK Government and when it will receive it. That is a perfectly reasonable question to ask, and I find it extraordinary that officials and Ministers have not been able to sit down with the Welsh Government, who want to work constructively with the UK Government on this issue for the benefit of leaseholders to answer those questions.
I hope that we will not only get an answer on that, but some further clarity on how the proposed tax and levy will work. Again, the Welsh Government are willing to work with the UK Government on this, as they did on the Fire Safety Act 2021. Again, we are not getting the communication that we would expect.
Secondly, on EWS1 forms, I recognise what the hon. Member for Kensington said. I am concerned that much of the new guidance is not flowing through. It came into effect on 5 April, but I am still being contacted by residents who are not getting the right answers on that matter from lenders, freeholders or estate management companies. What is happening on that? How many of the new chartered fire engineers and surveyors who are supposedly being trained are now in place and able to deal with the backlog of surveys?
I have two other points. One is that we need to look at the international examples. This situation faces many other cities and jurisdictions around the world. I think of Vancouver, which I know very well. The provincial government there had to pay out $3 billion to $5 billion to cover what was called the leaky condo scandal, with many similar issues around building safety defects. What are we learning from those examples around the world?
Lastly, just to be clear, this is not just about fire safety, critical as that issue is, but about all of those other issues, which is why we need to have the Building Safety Bill and answers to these questions as soon as possible.
That leads on to a point about making sure that the people who put this stuff on buildings in the first place are held responsible for their actions, not only where it caused death and injury, as in Grenfell, but where it has cost homeowners financially. All too often, any homeowner who seeks financial redress finds that the firm that built the properties is no longer in existence: the people behind the project are still building, but the company no longer exists. The company, firm or legal entity is dissolved at the end of construction, leaving no one responsible should problems become evident later, with homeowners having to pick up the tab or be stuck with negative equity while those who took their profits are in no way inconvenienced. Making it easier to pursue the companies or individuals who have built those properties would be a step in the right direction.
There is also a case for regulators to be given the powers to step up. The Prudential Regulatory Authority should be looking at the performance and behaviour of insurance companies when dealing with people in properties that may or may not have cladding of questionable flammability. I have heard of some demands being made that are simply not credible. The retrofitting of wider staircases stands out as a particularly ridiculous example. If the regulator needs to be given additional powers, that can be done. That is what this place is for, surely. Perhaps it is time to start asking for reports on the behaviours of the companies involved in the construction and maintenance of properties, including the insurance companies. Let us not leave it until there is another scandal. Let us not leave it to journalists to dig out the horrors that some families may be facing. Let us do the job here before it becomes another emergency.
We are only too happy as a city to relieve some of the pressures across the rest of the country, but we can do that only with the right sort of financial support to address the viability constraints we face: the higher remediation costs of contaminated heavy industrial land; the heritage deficit in converting historic properties; and the wider challenges of making development work in lower-value markets. Significant new development will happen in cities such as Stoke-on-Trent only with focused investment, but this will catalyse far greater private investment on top. The market, although starting from a lower base, is extremely buoyant—it is busier than almost anywhere else, according to Zoopla—with an increased appetite for good-quality, safe development. I urge the Minister to fully support our bids for levelling-up and brownfield funding for cities such as Stoke-on-Trent, so that we can deliver on the potential of our area as well as helping to relieve wider national pressures.
I particularly welcome the 5% mortgage, which will help more first-time buyers in Stoke-on-Trent South to own their own home. We need to keep this success going, providing better opportunities locally too, with good, skilled employment for good wages. We need to plan for the necessary infrastructure improvements as well. Let me take this opportunity to ask the Minister to support our Restoring your Railway fund proposal to reopen the Stoke to Leek line, as well as further developing our plans for a new station at Meir and increasing investment in local bus services. Of course, building safety is a fundamental concern and I welcome the £5.1 billion so far allocated to the safety remediation schemes. There is always a tension between the urgency of aims and the delivery of the right remedy, so I understand the need for the Government to get the measures absolutely right as far as possible.
One final issue I must raise is the danger posed by illegal cannabis farms in residential areas. The landlord guidance issued by the Ministry of Housing, Communities and Local Government has rightly been focused on covid safety of late, but I hope the Ministry will look carefully at how building safety encompasses the prevention of illegal uses of buildings, including to farm drugs and fund wider criminality. Power supplies are illegally tapped into and fire hazards are caused, and the human cost is considerable. Landlords who are at best naive about it and at worst complicit in cannabis farming in their properties are a live issue in Stoke-on-Trent. One residential street in my constituency has seen two cannabis farms uncovered within nine days of each other, and in Longton town centre, for a second time in two years, the derelict Woolworths building has been busted by Staffordshire police, with 1,500 cannabis plants found. MHCLG, working with the Home Office, police commissioners and local authorities, must redouble efforts to keep communities safe from buildings that have been made unsafe through illegal uses.
In conclusion, the Government are committed to higher standards of building safety, and the draft Bill stands as a testament to that, but I ask that we also see that investment in places such as Stoke-on-Trent.