My Lords, it is a privilege to open the Second Reading debate of this landmark Bill today. I will never forget the events that led us to this moment, nor the 72 people who lost their lives in the most appalling circumstances in the largest loss of life in a residential fire since the Second World War. The fire at Grenfell Tower in the early hours of 14 June 2017 should never have happened. The legislation we are bringing forward today is part of our wider reform to make sure that something like this tragedy can never happen again.
We cannot bring back those who lost their lives on that terrible day, and nothing can undo the errors that led to their deaths. Yet, if anything is to come from this disaster, it must be the lessons that we have learned from the mistakes that were made. That is why the Government appointed Dame Judith Hackitt to review the current building safety regime and recommend wholesale reform. Her findings were unequivocal and clear. Too often, regulations and guidance were misunderstood or misinterpreted. The drive to do things quickly and cheaply—the noble Earl, Lord Lytton, mentioned the concept of value engineering—meant that concerns were ignored and safety was not prioritised. There was ambiguity around who is actually responsible for the safety of buildings, with insufficient oversight and enforcement.
Dame Judith called for a complete overhaul of the system, and her recommendations underpin the Bill, with a golden thread that will ensure that, henceforth, people remain safe in the homes that we build for them. The Bill is unapologetically ambitious, creating a world-class building safety regulatory regime that holds all to the same high standard. The Fire Safety Act, which we will commence shortly, was the first legislative step towards delivering meaningful change following that dreadful tragedy. The Building Safety Bill represents the next step, delivering significant improvements to both the regulatory framework and industry culture, creating a more accountable system.
The Bill will deliver improvements across the entire built environment. It will strengthen oversight and protections for residents in high-rise buildings and give them a greater say, and will toughen sanctions against those who threaten their safety. Its focus on risk will help owners manage their buildings better, while giving the homebuilding industry the clear, proportionate framework it needs to deliver better, higher-quality homes. It is proportionate and strengthens fire safety requirements in all premises regulated by the fire safety order. It rightly focuses the new, more stringent requirements on those buildings and issues that pose the greatest risk.
To that end, we are strengthening our regulation of high-rise residential buildings which are over 18 metres or above six storeys in height, whichever is reached first; those buildings pose the greatest safety risks in the event of a spreading fire or structural failure. We are including hospitals and care homes that meet the height threshold during their design and construction. We will establish a robust link between safety, design, construction and occupation, with stringent duties to ensure safety throughout the building’s life cycle.
My Lords, I begin by saying that we welcome the Bill, which will bring about the long-awaited changes to the building safety regime following Dame Judith Hackitt’s independent review. I also thank my noble friend Lord Kennedy for the huge amount of work he has done on the Bill so far.
As the Minister reminded us, we must not forget why Dame Judith’s review and this legislation are so very important. He reminded us that in June 2017, 72 men, women and children lost their lives in an inferno fuelled by the highly combustible cladding system that had been installed on the outside of their tower block. We should remember that that tower block was also compromised by a range of other fire safety defects.
Four and a half years on from the Grenfell Tower fire, thousands of residents across the country continue to live in a state of constant fear over the safety of their homes and the cost of putting right past failures. Although we welcome the Bill and the recent promised government amendments, we have concerns that without further changes to provisions affecting leaseholders, it will still fall short of meeting the objective of learning all the lessons of the Grenfell Tower fire and fail completely to restore public confidence in our building system.
I will outline our concerns to the Minister and I hope that his response will provide further positive reasons as to why we can look forward to government action on the outstanding concerns. First, we believe that the Bill’s definition of “higher-risk buildings” could be strengthened to take into account the vulnerability of residents. The Minister mentioned the fact that the Government have modified the definition of higher-risk buildings to now include care homes and hospitals that meet an 18-metre height threshold. However, that still excludes often vulnerable people living in buildings below that threshold from access to vital protections under the new regulatory system. We believe that all supported accommodation should be included, regardless of its height.
My Lords, I start by declaring my interests as they appear in the register. I am the honorary president of the National Home Improvement Council and an honorary fellow of the Institute of Civil Engineers. For two years, I was the Minister with responsibility for building regulations in DCLG.
We must never forget the 72 deaths at Grenfell Tower or the injuries and trauma arising directly from gross failures by professionals at every stage of the construction process, refurbishment and its regulatory oversight. I first aimed to tackle the long-standing dysfunction of regulation in the industry in my Sustainable and Secure Buildings Act 2004. Section 8 on certification and Section 9 on appointed persons gave a power to the Secretary of State to bring in what we now call the “golden thread”. Sadly, those powers remained unused for the following 18 years.
It will not surprise your Lordships that I and my colleagues give an enthusiastic welcome to this overdue Bill. We want to see its speedy passage and quick implementation. My noble friend Lady Pinnock and others will spell out the urgency of all necessary repairs being carried out on the tens of thousands of existing homes that have been found to have fatal flaws in their construction, with full financial protection for innocent leaseholders.
The bold ministerial words uttered so far have cut no ice with leaseholders who face five-figure bills and threats of repossession. Evidence of action is needed. Repairs must be undertaken without delay; bills settled by those who caused the problem, and families made safe in their home. If the developers push back, and the Secretary of State finds himself in the High Court, that must not be a reason to leave leaseholders almost literally swinging in the wind—with no cladding or insulation, and with enormous bills for waking watch and for their basic heating.
Speed is also needed so that the construction industry can get on with the job. It cannot invest in the right skills and training, nor develop competencies without the certainty provided by this legislation.
My Lords, my contribution to this debate relates to the new homes ombudsman, the scheme that will be established by the provisions in Part 5 of the Bill. I declare past interests as the previous chair of the Property Ombudsman and chair of the Government’s working group on regulation of property agents.
Among the catalogue of criticisms of this country’s major housebuilders, redress for buyers of defective properties and victims of shoddy workmanship, scams and dodgy deals deserve our urgent attention. We are all familiar with the long list of ways in which the volume housebuilders have let us down—building safety, yes, but also poor design, low space standards, soulless estates, broken promises to provide affordable homes, exorbitant profits and bonuses for bosses, leasehold scams, sales agreements that contain unfair conditions and excessive charges, lack of investment in training, skills, and apprenticeships, building on greenfield sites when brownfield development would be far more appropriate, and building out only at a speed which ensures continuing scarcity and ever-higher prices. We need also to confront housebuilders’ defective workmanship and dreadful consumer/customer service in responding to entirely justified complaints by home buyers. It is excellent that the Government are seeking in this Bill to address this issue.
The proposal for a new homes ombudsman came from two reports by the All-Party Parliamentary Group for Excellence in the Built Environment, supported by the Construction Industry Council. I declare my interest as a vice-chair of that APPG alongside my noble friend Lord Lytton. Our first report, in 2015, entitled More Homes, Fewer Complaints, commended the idea of a new homes ombudsman. Our second inquiry, in 2018, spelled out how an ombudsman could drive up standards and improve consumer rights. It was skilfully chaired by Eddie Hughes MP, who is now the very Minister responsible for implementing the initiative. He says in his foreword to our report:
My Lords, I welcome today’s debate, and I thank my noble friend the Minister for his commitment to this issue. It is appreciated.
We all know the importance of the Bill before us today and we all know what led to its creation: the devastating fire at Grenfell Tower. It was a tragedy that shocked and shamed the country, yet more shocking still has been the evidence that has since come out of the public inquiry. Listening to all those involved makes for a deeply depressing experience. With the notable exception of RBKC, no one is ever to blame. It is always someone else’s fault, someone else’s problem.
Take the architects involved in the refurbishment. Apparently, they did not have design responsibility; that was the contractors’—except the contractors say that they delegated it to the cladding subcontractor. But no, hold on a minute, the cladding subcontractor says that the design compliance was not its job but the job of—wait for it—the architects. As for the companies that made the cladding, Arconic, Celotex and Kingspan —no, none of this was their responsibility. Never mind that the inquiry evidence shows that they manufactured or provided products that they knew or suspected to be dangerous for buildings of above 80 metres. Nor, apparently, was it the fault of the bodies responsible for testing and certification—bodies that have been accused of being too close to their customers and failing to provide the necessary protections.
Worse even than all this is the casual disregard—the flippancy—shown by pretty much everyone involved, at every level, in an industry that is supposed to have safety at its core. It is impossible to convey, so here they are in their own words, as heard at the public inquiry. An email from a senior staff member at Local Authority Building Control about the wording of a certificate, wrongly asserting that Kingspan’s insulation could be used on high-rise buildings, states:
My Lords, I am pleased to join others in welcoming the Building Safety Bill to the upper House and I congratulate the Minister on its introduction. The tragedy of the Grenfell fire four years ago exposed huge concerns about building safety in relation to both fire safety and building standards more generally. The Bill is a hugely important piece of legislation in our efforts to ensure that a tragedy like the fire at Grenfell Tower can never happen again.
Housing associations across the country have been working since June 2017 on assessing and remediating building safety risks in thousands of blocks. As chair of the National Housing Federation, the representative body of housing associations in England—I declare that interest—I have come to understand and appreciate the depth and breadth of the crisis.
It is the priority of the sector to ensure that safety concerns can be identified and addressed as quickly as possible to help residents feel safe in their homes. So many of us will remember from the passage of the Fire Safety Act that progress towards ending this crisis has been delayed and prolonged by seemingly intractable funding challenges, not least for innocent leaseholders facing huge bills.
That is why I very much welcome the announcement that the Secretary of State made in the other place on 10 January that the Government will protect leaseholders from the costs and make developers, contractors and manufacturers pay to fix the building safety issues that they caused. The Government are right to make those who profited from unsafe building practices pay. This important step will enable us to start the process of charting a course out of the crisis.
As I have mentioned many times in this House, housing associations are not-for-profit organisations providing affordable homes for those on the lowest incomes. To cover the costs of remediation on buildings where social renters live, housing associations are already expecting to spend in excess of £6 billion on building safety works. As a consequence, housing associations are now less able to improve their current homes or build new ones.
My Lords, I declare my interest as a vice-president of the Local Government Association and as vice-chair of the All-Party Parliamentary Fire Safety and Rescue Group. I look forward to hearing the valedictory speech of the right reverend Prelate the Bishop of Winchester. He was formerly general secretary of the Church Mission Society. At that time, I remember an imaginative fundraiser when the then Reverend Graham Kings led a camel from Oxford to Cambridge to raise funds for rural Kenyan schools. I did the last day of that walk, and I have to say that the camel was mobbed as we finished it. Large amounts of funds were raised, and there was lots of media coverage—CMS objective achieved. I wish the right reverend Prelate well in his retirement.
It is worrying that, five years after Grenfell, the necessary cultural changes in the building industry have still not happened. We know that there are too many developers prepared to game the system, despite the Grenfell inquiry and Dame Judith Hackitt’s review. There still is not a level playing field to protect tenants and leaseholders, not only on who should pay the costs, so ably explained by the noble Baroness, Lady Sanderson, but more broadly on the other deeply unsatisfactory breaches of safety, beyond cladding, which also make people’s homes unsafe. I also echo her comments about two staircase exits in high-rise buildings—that is absolutely vital.
Other breaches of building regulations are not covered, such as a lack of compartmentation and electrical standards still not being met, both of which are high-level risks for fire and the spread of smoke and fire. Without compartmentation, staying in your flat is worthless. Doors that do not meet fire safety standards have caused deaths in common parts, including on emergency exit stairwells. There was a fire in a block of flats in Tower Hamlets just two days ago, where smoke escaped into the stairwell and residents trying to get out were overcome. As with cladding, leaseholders are having to pay for all this work to be put right, even though developers have a clear responsibility for not building unsafe buildings, and refurbishment companies ignore the original fire and building regulations. This is totally unjust.
My Lords, I welcome the Building Safety Bill, and its provisions to implement the recommendations of the Hackitt report following the Grenfell Tower tragedy. In particular, I was glad to hear the ambitions stated by the Minister that it should represent a complete overhaul of the culture of the construction sector. In so doing, it presents an opportunity to tackle issues that have bedevilled the sector for many years, with a damaging effect on safety and quality. Many of these affect smaller construction firms and their relationships with the larger contractors for whom they work, as well as their ability to invest in improving their skills, quality, productivity and, of course, safety. I shall focus specifically on the issue of cash retentions.
The Hackitt report states:
“Payment terms within contracts (for example, retentions) can drive poor behaviours, by putting financial strain into the supply chain. For example non-payment of invoices and consequent cash flow issues can cause subcontractors to substitute materials purely on price rather than value for money or suitability for purpose.”
There is broad consensus in the sector that action is needed on retentions, and that this requires legislation. The Government have indeed been exploring the options and have conducted a number of reviews and consultations over the years. But their insistence on seeking
“industry-led solutions, rather than further regulation”—[Official Report, Commons, Building Safety Bill Committee, 26/10/21; col. 455.]
to quote the current Construction Minister, Christopher Pincher, during Committee in the other place, has resulted in stalemate. With the industry inevitably divided between the beneficiaries and victims of retentions, this makes consensus unrealistic, if not impossible.
There have been some welcome steps forward. The snappily titled Guidance on Collaborative Procurement for Design and Construction to Support Building Safety, produced by the procurement advisory group set up by the Minister’s own department and issued just last month, reiterates the Hackitt report finding. It states:
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The Bill provides the framework to ensure that, during the design and construction, defined duty holders have clear responsibilities for compliance with building regulations, including fire and structural safety. They will have to clear a series of hard stops, through the new gateway system for in-scope buildings.
In occupation, every building in scope will have an identified accountable person with clear responsibility for safety matters. Their duties include registering the building with a new regulator, building an evidence and risk-based safety case, and the continued evaluation of potential hazards. Importantly, it will be a criminal offence not to carry out these duties effectively, punishable by an unlimited fine and up to two years in prison.
We are giving residents a stronger voice in the system through the Bill, making it easier for them to seek redress and raise concerns. The Bill will require an accountable person for a high-rise residential building to engage with their residents and establish a formal complaints process for residents to raise concerns. Both the accountable person and the responsible person for premises regulated by the fire safety order will be required to provide residents with access to key building safety information.
These measures will be overseen by the new building safety regulator within the Health and Safety Executive. The regulator will be equipped with robust powers to crack down on substandard practices. It will oversee the safety and standards of all buildings and will provide important independent advice to government on building safety and standards. It will support a significant improvement in the performance and competence of industry and building control professionals.
The Bill ensures that the regulator will regulate in line with best practice principles, being proportionate and transparent and targeting activity where action is needed. Crucially, it will act to ensure that proportionality is embedded within its operations and in its work with accountable persons to assess buildings.
I turn now to construction products. The testimony we have heard at the Grenfell Tower Inquiry has been shocking to say the least and has exposed a culture of corner-cutting, Spanish practices and disgraceful behaviour by an industry that has compromised building safety. We intend to put a stop to this. Following the Grenfell Tower fire, we banned the use of combustible materials on the external walls of high-rise residential buildings. The Bill creates powers to strengthen regulatory oversight for firms that manufacture and sell construction products and, crucially, powers to remove unsafe construction products from the market and take action against those that break the rules. The Bill will improve the standards of our construction products oversight regime.
The polluter must pay; developers and construction product manufacturers must be held to account. Residents must be protected against substandard materials, workmanship and practices that make homes unsafe. Our new regime will help address these issues for high-rise residential buildings, but we need to expand legal safeguards for residents wherever they live. That is why the Bill retrospectively extends the period during which compensation for defective premises can be claimed by over double the current period—from six to 15 years prospectively and by 30 years retrospectively —to make sure that the failures of the past can be addressed. This is a significant step forward, and we are going further, expanding the scope of the work for which compensation can be claimed to include future renovations.
We are also strengthening redress for people buying a new-build home through provisions for the new homes ombudsman scheme that will provide dispute resolution and resolve complaints involving the buyers of new-build homes and developers.
We also know that we must go further to protect innocent leaseholders, who are the victims, from bearing the financial burden of this crisis. I thank your Lordships, in particular my noble friends Lord Blencathra and Lord Young of Cookham and the noble Lord, Lord Stunell. I could not forget the noble Lord, Lord Kennedy, as well for being ever so helpful during these debates. I also thank the noble Earl, Lord Lytton, the noble Baroness, Lady Pinnock, and, of course, the right reverend Prelate the Bishop of St Albans, who has been an inveterate campaigner on behalf of leaseholders. This is a hugely important issue; it is important that we continue to do our best collectively to protect leaseholders.
The Secretary of State in the other place has been unequivocal in his determination that leaseholders living in their own flats in medium and high-rise buildings will not pay a penny to remediate unsafe cladding. We have scrapped proposals for loans and long-term debt for medium-rise leaseholders. We have allocated a further £27 million to help bring the misuse of waking watches to an end, and we are working towards making sure that leaseholders are protected from the risk of forfeiture relating to historical building safety issues, until a new industry-developed system is in place. But we know that more is needed. We will also explore further statutory protections for leaseholders and we will bring forward proposals for this House to consider at the earliest opportunity. I look forward to working with your Lordships on the Opposition Benches, with the Liberal Democrats, with the Cross-Benchers, and even with my own awkward squad, to ensure that this 143-clause Bill perhaps adds the odd extra clause and is the best possible Bill that we can take forward and get on the statute book.
The Government have accepted their share of responsibility and made significant financial provision—over £5 billion—through the ACM remediation programme and the building safety fund. Some developers have already done the right thing and provisioned or are funding remediation works. We are also seeing that among registered providers. But too many others have failed to live up to their responsibilities; in some cases, they are not engaging at all with government. We cannot keep looking to the taxpayer to keep bailing out this failing industry: we must get the polluters to pay.
We have already announced a £2 billion tax on the biggest residential developers through the residential property developer tax and a further levy on developers building tall buildings through the Building Safety Bill, and we are now engaged with industry to ensure that it pays its fair share for fixing cladding problems, rather than the leaseholders. I point out that where both private developers and social housing organisations have developed land, they are equally culpable if they put up unsafe buildings and they must pay. Our expectations are clear: industry and the owners of land, such as registered providers, should fix the buildings they were responsible for. They need to contribute to a wider fund to ensure that remaining buildings are remediated to protect leaseholders.
In a round table held with the Secretary of State, senior executives from the country’s biggest developers agreed that leaseholders should not pay. We continue to engage with them on how they will deliver a fully funded action plan by early March. We are also acting directly to make sure that those who manufactured dangerous products, built unsafe buildings and knowingly put lives at risk are also properly held to account. We have had a similar meeting with construction products manufacturers. I was shocked that Arconic, one of the manufacturers of the material used on Grenfell, did not show up; that is completely unacceptable. We have been clear in our intent: industry needs to develop real proposals to fund this crisis. If it does not agree a solution soon, we will, if necessary, impose one in law.
The Bill represents the most radical revision of our building safety regime in generations. It is a complete overhaul of safety management, putting residents’ safety at the absolute heart of our reform. I commend the Bill to the House.
I now turn to funding protections for leaseholders. Does the Minister agree that leaseholders in all affected buildings, regardless of their height, should be protected from covering any costs related to past regulatory failings, and that should include cladding and non- cladding fire safety defects? That protection should be retrospectively extended to leaseholders who have already made significant out-of-pocket investments in remediation works. The Government and the housing and development industries must be prepared to fund, in full, both cladding and non-cladding remediation works. As it stands, the Bill simply does not go far enough to address these issues.
We strongly agree with the Minister that developers must be held to account and I was pleased to hear him say that if this does not happen, law will be brought in to ensure that it does. So I would be interested to hear from him more about how that would take place. The Minister recognised that not all of industry has stepped up. How are the Government going to ensure that industry, right across the board, will play its part and pay the funds that it has been asked to? How will the Government continue to play their part and supply the funds that are needed? The Minister rightly said that a lot of money has been promised but this is a huge issue, with many residents very much out of pocket.
We need to make sure that the twin objectives of fixing the building safety crisis and delivering new and improved social housing can be delivered simultaneously through the Bill. Concerns have been raised that the housing building funds could be plundered. Could I please have some assurance from the Minister in that area?
I mentioned that all remediation costs should be covered retrospectively. Can the Minister advise leaseholders as to how they are expected to go about reclaiming those costs? When will the Government publish their promised amendments to provide concrete assurances to leaseholders that they will not be liable for those remediation costs? Will we be seeing those amendments in Committee?
The provisions of the Defective Premises Act currently stipulate that a leaseholder can make a legal claim for compensation if their dwelling is unfit for habitation, as long as the claim is made within six years of the building being constructed. We welcome the amendment made in the Commons that extends that eligibility period from six to 30 years and that claims can now be made for defects arising from refurbishment works. Another crucial change is that leaseholders will be able to make claims retrospectively if their claims fall within the eligibility period. However, we have concerns that the cost and time implications of making a legal claim against developers will prevent many leaseholders from benefiting from this measure. Will the Minister think about what the Government could do to clarify this because it would be helpful if, in the first instance, they said that they expected building owners and freeholders to make a claim as they are more likely to have the capacity to do so than individual leaseholders? That expectation would also reflect the legal duty for building owners to prove that they have carried out their due diligence on finding all possible sources of funding that do not rely on leaseholders paying.
We also welcome the Bill’s changes to the fire safety order, mentioned by the Minister, which introduce the duty for fire risk assessments to be completed by competent professional, and the improvements to residents’ access to safety information about their buildings. However, it is unclear whether this duty for responsible persons to share fire safety information extends to prospective residents and residents who are not leaseholders but tenants in a building. If the Minister could clarify that, I would be very grateful. This clause could be strengthened by clarifying that responsible persons must proactively share fire safety information, including fire risk assessments in full, with prospective and current residents, including both leaseholders and tenants.
I turn briefly back to the area of most concern to leaseholders: the funding of the cost of cladding remediation and building safety. The Labour Party has been clear in debates both in this House and in the other place that leaseholders should not have to pay to fix this crisis. The Minister confirmed that this is the Government’s point of view as well. Overall responsibility for funding building safety work has to lie ultimately with the Government to ensure that this happens.
It is also clear that industry has played a role in making decisions that have compromised the safety of buildings and has a part to play in shouldering the burden of costs. The Minister spoke about the recent announcement by the Secretary of State, which we very much welcomed, about the Government aiming to recover costs from developers for cladding remediation. But, as has been asked before, how does this help leaseholders who live in buildings with non-cladding-related defects, who also face excessive charges to make their homes safe? The Bill must protect all leaseholders facing costs for fire safety defects that they did not cause.
We recognise the Government’s efforts to increase the building safety fund, but unfortunately the amount allocated is still not enough. Can the Minister reassure this House that the funding shortfall will not lead to a “first come, first served” allocation? This may mean that building owners with less experience of managing large refurbishment and construction projects will lose out, as it could take them longer to get together the information and evidence necessary to properly complete an application to the fund. This could include buildings where leaseholders exercise their right to manage, for example, or where there are projects with additional complications.
The Government need to find a solution that can make all homes safe, regardless of height, without passing on the burden of cost to leaseholders. The residential property developer tax and the building safety levy are very welcome, but will the Government ensure that the right measures are in place to prevent any unintended loss of affordable housing through lower Section 106 commitments?
The cost of waking watch has been a huge concern for many people, and I was pleased to hear the Minister talk about this. It is really good that in December the Government announced a £30 million waking watch relief fund and that this has now been increased. However, the fund still fails to reimburse leaseholders who have already paid out for interim waking watch costs and does not consider those who continue to need a waking watch as well as a fire alarm. Can this be looked at again?
To answer all these outstanding concerns, Labour has called on the Government to establish a new building works agency. This single body, which would be accountable to Ministers, would decide what works are necessary and commission and pay for them, then sign off the building as safe at the end of the process. The building works agency would work closely with local authorities and fire chiefs, who have been gathering data and are well placed to know how to manage projects locally. It would also have the legal powers to pursue those responsible through the courts if necessary. Keeping people safe in their own homes should not be a political issue, so will the Minister at least consider this very practical suggestion, given in good faith from the Opposition Benches? Will he work with both Labour and other noble Lords as the Bill goes forward to Committee so that we can continue to address concerns and improve this important piece of legislation?
In closing, I put on record my huge respect for the survivors and the bereaved of the Grenfell Tower fire and for the wider Grenfell Tower community, who continue to seek not only justice for their families and neighbours but wider change to ensure that everyone is safe in their own home. I know the Minister has worked hard to bring forward this legislation and I thank him for his diligence, yet there are still improvements that could be made. I offer him our full support in making a good Bill even better.
I look forward to listening to the debate today, and in particular to the valedictory speech of the right reverend Prelate the Bishop of Winchester. I wish him well for the future.
Of course, not all this can be put into the Bill. We shall certainly vigorously press the Government to explain their intentions more clearly when we consider the draft statutory instruments alongside our further considerations on the Bill. This way, we can assist the Government in producing a coherent scheme of regulation that will be fit for purpose. Such an examination will help to ensure that there is a speedy transition from where we are now to where we must be, so that we do not create another green homes grant fiasco. That landed without notice on an unprepared industry and was scrapped within six months.
The long title of the Bill is helpfully comprehensive and inclusive. It makes,
“provision about the safety of people in or about buildings and the standard of buildings”.
However, the specifics addressed in the Bill are quite narrow. Only a small class of buildings will come under the new rules. Only one aspect of their design, construction and occupation is to be regulated by the building safety regulator. As it stands, the regulations and monitoring of other measures required for the avoidance and mitigation of fire in all other buildings will remain subject only to the existing regulatory regime. This system is certainly not rigorous. The British Woodworking Federation estimates that there are 600,000 unfit fire doors currently installed in the United Kingdom. Is the Minister satisfied with this? Does his department simply accept that regulatory failure of fire protection is acceptable, as long as it is not in a high-rise building? We will want to test these points in Committee and will invite the Minister to bring more buildings into scope.
A further gap in robust regulation is that even in high-risk or high-rise buildings, however defined, the application of all other parts of the regulations will be subject only to the existing failed compliance system, with the failing inspection service still responsible for regulatory oversight of that building’s energy performance and weather resistance or climate resilience—among other things—with no golden thread, no long-term monitoring and no accountability.
So, for instance, when zero carbon is not achieved in a high-rise block and faults in design or construction or subsequent alterations emerge, those leaseholders would be no further forward than they are now. It could even be that the same residents in the same flats in another 10 years face bills for remediation of failed insulation, unless, of course, the building safety regulator is also to take on the monitoring of those other parts of the building regulations. The rule should be “One building, one building regulator” for all aspects of building regulations, and we will want the Minister to face up to that in Committee.
The current regulatory system for building construction is manifestly not fit for purpose, regardless of a building’s height, complexity or fire risk, or whether the building inspector is from the private or local authority sector. This Bill is a necessary response to the tragedy of Grenfell, but it is also a once-in-a-lifetime opportunity to fully reform that failed system and we will put our views about how that might be done to the Minister in Committee.
Finally, the architecture of the Bill is complex, with an array of new structures, new professions and new roles as a means of achieving its ends. It is not by any means simple or intuitive, and we will be seeking clarification and refinement at Committee stage so that we have a workable and understandable structure that will produce safe buildings well into the future.
This complex Bill is very much welcomed on this side. We want to see it proceed quickly and be implemented smoothly. We must guarantee that the terrible tragedy of Grenfell can never be repeated. We must ensure that the innocent are safeguarded from the folly, carelessness and greed of those who have committed the offences and that those thousands of residents already caught up in the nightmare of unfunded remediation are fully protected. Our work on further stages of this Bill will be to work with the Minister to make sure that we achieve that.
“I have been contacted by many MPs with despairing constituents who have implored them to help achieve redress from housebuilders refusing to rectify poor workmanship … Consumers desperately need greater leverage to drive a change in this culture”.
Submissions received by the inquiry from home buyers described how builders failed them, making buying a new home, as one first-time buyer said,
“the worst decision of their life.”
Surveys show that well over 90% of home buyers have experienced snags or defects when moving in, and in over 70% of those cases the problem has never been fully resolved. We are a very long way from zero-defect construction. It is quite extraordinary that the new house buyer has to expect snagging difficulties, problems with doors and windows not fitting properly, leaks and cracks. If cars—vastly more complicated things than houses, with thousands of working parts and the capacity to travel safely at speed—can be purchased without defects then why not static, solid, basic houses?
So it is very good news that we are now to have an ombudsman to whom the home purchaser can turn. There have been concerns over the suggestion that the industry-based New Homes Quality Board, rather than the Secretary of State, might appoint the ombudsman and write their code of practice. This could undermine public trust and lead to accusations that the housebuilders were pulling the strings.
My short list of questions today to the Minister, whom I congratulate on bringing forward this legislation, relates to the powers that the new homes ombudsman will possess. In essence, I am asking: will the ombudsman have real teeth?
First, could the Minister confirm that the new homes ombudsman will have the power to expel a housebuilder from the redress scheme—for example, for non-payment of compensation to a buyer—and that this would mean, quite properly, the ombudsman having the power to stop any further sales by a builder since they could not continue to sell homes if no longer in the scheme?
Secondly, will the ombudsman be able to award high enough levels of compensation to deter bad practice?
Thirdly, in common with many ombudsman schemes, will this ombudsman have the power to undertake own-initiative investigations around issues likely to justify multiple complaints, without each complainant having to make a separate case, and will it be able to publish guidance accordingly?
Fourthly, to avoid sharp practices and eliminate detrimental clauses in the small print, will the ombudsman be able to require the use of standardised sales contracts?
Fifthly, can it be that the ombudsman will have jurisdiction only for the first two years after a purchase, bearing in mind that defects often emerge after that date and that warranty providers exclude all the builder’s smaller defects that can make life miserable? The Legal Ombudsman, for example, can take action up to six years after a problem has been identified.
Sixthly, will the ombudsman be able to specify that builders use only approved warranty providers that have passed a rigorous assessment?
Seventhly, will the ombudsman be able to ban non-disclosure agreements—“gagging orders”—which some builders, for fear of gaining a poor reputation, have insisted on from buyers whose homes have been subject to remediation?
Eighthly, will the ombudsman publish its decisions, to name and shame offenders and exonerate the others?
Lastly, will the ombudsman be able to extract a sufficient levy from the housebuilders to resource all the work necessary to deal with what I suspect will be a multiplicity of complaints from all over the country?
I look forward to hearing the Minister’s response and, I hope, to being able to support this important ingredient in the Bill.
“This issue has been burning for a LONG time though, hasn’t it? (Get it!!!!) Why is it raising its head again all of a sudden?”
An email between the contractors, fire engineers and architects, about the need to install strong fire barriers, says:
“There is no point in ‘fire stopping’, as we all know, the ACM will be gone rather quickly in a fire!”
Messages between employees of Kingspan discussing the rating of their material as class 0, or non-combustible, state:
“Doesn’t actually get class 0 when we test the whole product tho. LOL.”
An email from Grenfell’s fire risk assessor to the council’s tenant management organisation, after the LFB contacted them asking for help in identifying vulnerable persons, said:
“I would say you have nobody that this refers to … If you identify anybody now questions like why were they not included in the buildings FRA spring to mind. A good response I believe would be thank you for this information if we find anyone in the future we will let you know.”
For reference, while some updating did later take place, 15 of the 37 residents classed as vulnerable and disabled died in the fire.
This, then, was the culture of a truly broken industry. Within this, I fully appreciate that the role of government must also be looked at, and it will be considered by the inquiry shortly. I also appreciate, however, that that must not take away from the huge strides that the Bill will make.
Before I get on to that, I have one question for my noble friend the Minister. Incredible as it seems, post Grenfell and after all we have learned, the regulations still allow for tall residential buildings with only one fire escape staircase. Last month, it came to light that plans for two such developments in London are being rethought after concerns were raised locally and by the LFB.
Dozens of other countries require two or more escape stairs in such buildings, and I would like to know whether we will consider doing the same. It seems an anomaly when the Bill will do so much to fix the system, including the building safety regulator; new competence requirements for anyone carrying out design or building work; gateway points to ensure that building regulations compliance is considered at every stage of design and construction; and an accountable person who will ensure that residents are given a voice in decisions that concern the safety of their buildings. These changes are all designed to ensure that a tragedy such as Grenfell never happens again. While I understand that there will be improvements to make, regarding cladding remediation in particular, I urge noble Lords to bear in mind the fundamental reason for the Bill: that no one has to endure what the residents endured that night.
I declare my interest as a community adviser on Grenfell. I have worked with many members of the community since the days immediately after the fire. I have witnessed their strength and dignity in the face of so much suffering. I have heard what happened to them. It is not something that they like to talk about but, with kind permission, I want to tell one man’s story.
He grew up in Grenfell Tower and his mother and sister still lived there. On the night of the fire, they were trapped on one of the upper floors. His sister called him, leaving the line open as he rushed from his home in north London. Standing inside the cordon area, he saw his friends at the windows. He watched the flames engulf the building, as he remained on the phone to his sister. Despite her deteriorating situation she kept insisting she was okay, until finally she began to fade away. He heard a banging on the floor and then silence. At this point, he thought he had lost his mum too but, 30 seconds later and for the first time in the early hours of that morning, he heard her voice. She was struggling for breath and said her last words: “I can’t breathe, I can’t breathe.” He stayed on the phone, unable to cut off the call, hearing only the sound of the fire but hoping against all hope that maybe they would be okay, maybe someone would rescue them. It took him over an hour before he finally managed to switch off his phone.
Can noble Lords imagine how difficult that must have been and how difficult the reliving of that moment must still be? That is the reality of Grenfell. That is why the Bill is before us today—and it is why we must do everything we can to ensure its safe passage through this House.
The National Housing Federation’s 2021 survey found that 12,900 homes, more than 10% of affordable new homes to be built over the next five years, have already had to be cut to prioritise spending on building safety. I welcome confirmation from the Secretary of State that leaseholders of buildings owned by social housing providers will have access to the new funding to avoid these costs spiralling further. However, like others, I would welcome clarity from the Minister on the Government’s approach to non-cladding costs, and whether funding recouped from industry will be allocated for this purpose.
I know that the housing association sector is committed to working closely with the Government to find a fair and sustainable solution to our housing prices that balances both making buildings safe and enabling new homes to be built. I was delighted to hear the Secretary of State refer to building social housing and improving existing homes as a core mission of his department. However, I was worried that correspondence from the Treasury made public at the start of the year suggests existing departmental budgets would need to be used, should it not be possible to recoup money from industry. That is why I hope that the Minister will assure us today that the affordable homes programme will be protected to avoid any further reductions in the delivery of much-needed affordable housing.
I also want to support the Government’s evidence-based approach to assessing and managing risk in buildings. It is right that, where safety issues present an unacceptable level of risk, they are fixed with urgency; it is also right that, if risks can be eliminated and effectively minimised without vast building works, these options should be explored and, where suitable, implemented. I welcome the launch of PAS 9980 to aid this transition. We are in the early stages of implementation, and it is not yet clear how it would truly impact on how mid-rise buildings are treated and, in truth, what impact it will have on the amount and costs of work needed on buildings between 11 and 18 metres. I understand that the Government have already undertaken a survey of such buildings to ascertain a view on this; I also believe that close monitoring of the implementation of PAS 9980 could greatly help the Government, building owners, tenderers and lenders in understanding the evolving situation. Will the Minister commit to publishing the findings of the Government’s recent survey, and what plans does he have to monitor the approach to proportionality?
Finally, I welcome the part of the Bill that introduces a new homes ombudsman scheme—and I declare an interest as the chair of the Property Ombudsman. I wholeheartedly agree with the points made by the noble Lord, Lord Best—indeed, I would like to see the ombudsman report directly to Parliament. I just want to emphasise that, at a time when public and particularly home-buyer confidence is so low, the need for transparency and absolute real and perceived independence is crucial if the Government are to reassure homeowners that the ombudsman has teeth. Only that way will they have the trust and confidence in the redress or reassurance that they receive from the ombudsman. This is especially true when property developers do not comply with a decision; there needs to be a clear and transparent mechanism for enforcing decisions, in the worst case removing businesses from membership, and communicating this to existing and potential home-buyers. That enforcement should apply not just to financial redress but to implementation of recommendations to drive better outcomes for all.
This urgently needed Building Safety Bill has the potential to provide safety and security to those whose homes have wrongfully been built with safety risks. I hope that it will create a future in which the horrors of an event like Grenfell are no longer possible. The housing association sector wants to work with government to ensure that the Bill is as effective as possible at delivering that ambition.
Over the last two years, the All-Party Parliamentary Fire Safety and Rescue Group has responded in considerable detail to the plethora of government consultations on fire and building safety, and I am grateful to the Minister for attending our meetings on a fairly regular basis. Last year’s consultation from the DfE proposed to remove the requirement for sprinklers in all but a very small percentage of new schools. Twenty years ago, as a former chair of governors of my local primary school, I saw it burn to the ground. The disruption to the pupils’ education over the next two years cost Cambridgeshire County Council many times more than even the retrofitting of sprinklers would have cost. To not even put sprinklers into new schools is just unacceptable.
The case for sprinklers is compelling in high-rise blocks, as well as non-residential buildings. They save lives, they can save jobs and precious education, and they prevent damage to the environment by reducing the severity of fires. As a result of the multiple-fatality fire in 2009 following the refurbishment of Lakanal House, the London Fire Commissioner told the coroner that automatic fire sprinkler protection would have prevented the deaths of six residents. Subsequently, the coroner recommended to the then Secretary of State that he should encourage social housing providers in high-rise blocks of over 18 metres to consider retrofitting automatic sprinkler protection. Can the Minister say if the Government will now accept this recommendation?
Both the All-Party Parliamentary Fire Safety and Rescue Group and the National Fire Chiefs Council in their previous responses to the Regulatory Reform (Fire Safety) Order 2005 consultation said that there remains a fundamental disconnect between the non-worsening conditions of building regulations and the expectations of continuous improvements through the fire risk assessment process set out by the fire safety order. Regulation 4 of the Building Regulations 2010 states that, where the work did not previously comply with Schedule 1, the new work, when complete, should be
“no more unsatisfactory in relation to that requirement than before the work was carried out”—
meaning that the general fire precautions may never be improved to modern standards. This runs contrary to the principles of prevention outlined in the fire safety order—that premises’ risk assessments should adapt to technical progress and reduce the overall risk within buildings.
The all-party group also noted that Dame Judith Hackitt concluded that the construction industry’s prevalent culture was undermining building safety. She referred to procurement regimes that were not fit for purpose. In relation to building safety, she added that
“unhelpful behaviours such as contract terms and payment practices which prioritise speed and low cost solutions, exacerbate this situation.”
She concluded that poor procurement and payment practice
“provide poor value for money and poor building safety outcomes.”
She recommended that contracts’ payment terms and practices should be recorded as part of a proposed digital building safety file. Does the Minister agree with these conclusions?
I thank the Local Government Association for its briefings on the provision for duty holders to choose their building control regulator. It says:
“By requiring regulators to remain in competition with ‘approved inspectors’ for the majority of buildings, the Bill leaves in place one of the root causes of the current crisis.”
It absolutely does. It is quite extraordinary that it should be allowed to continue. The LGA goes on:
“Compliance with regulation cannot be a commodity and local authority building control should not be left to tackle non-compliance in buildings over 18m while simultaneously having to compete with private businesses for work in out of scope buildings, often owned by the same developers.”
My honourable friend Daisy Cooper MP has repeatedly asked, since the passage of the Fire Safety Act 2021, if the Government will consider the creation of an independent register of qualified fire risk assessors. At the time, she was told it was being considered, and withdrew an amendment from that Bill on that basis, but nothing has happened. Can the Minister say whether this register is now planned, as well as a register of safe building materials?
Finally, what will be in the regulations is critical. Some of the language used in the Bill is not exact enough; what will matter is the regulations that underpin this extremely complicated Bill, which will need to be ironed out before it becomes operational. I hope that during the passage of the Bill, the Minister will be able to clarify some of these key issues at the Dispatch Box to give your Lordships’ House confidence that we will finally see regulations that will protect lives, ensure accountability by those who have not followed the standards and protect buildings.
“The use of cash retentions can also interfere with cashflow and can undermine the principles on which collaborative relationships are based. Arguably, any collaborative relationship should exclude the use of cash retentions. If exceptional circumstances require a retention, then it should be held in an account ring-fenced by a trust arrangement.”
I say amen to that, but it will not happen without government action. Ministers regularly give assurances that they recognise the importance of the issue. To quote Christopher Pincher again:
“I also recognise—I think we all do—the argument that poor, adversarial practices can lead to unsafe, low-quality building safety outcomes, as well as poor value for money.”—[Official Report, Commons, Building Safety Bill Committee, 26/10/21; col. 454.]
There is work going on in other government departments, notably BEIS, including through the Construction Leadership Council, which it co-chairs with industry, and which has a business models work- stream looking at how to eliminate retentions. The CLC has endorsed the road map produced by Build UK which aims for an end to retentions by 2025, but the road map on its own will not bring this about.
There are other steps that the Government could take. It is disappointing that there is no reference to discouraging retentions in the government-sponsored The Construction Playbook that sets out much positive guidance on procurement. It is hardly helpful that some departments, notably the Department for Education, continue to use retentions. Perhaps the Minister could say whether we can expect any progress in those areas.
We have seemingly endless reports, advisory groups, workstreams, road maps, guidance and good practice models, but without the essential legislative underpinning it seems unclear how the Hackitt report’s warning that poor payment culture leads to poor and unsafe buildings will be addressed. Meanwhile, retentions will continue to impact safety and quality.
I would welcome a clear indication from the Minister about which option the Government now favour: an outright ban on retentions, a trust arrangement such as a retention deposit scheme or some combination of both, and how they see any such approach being implemented, given the need for Government to give a lead. After all these years of reviews and consultations, a clear direction and plan are needed if the aspiration of resolving retentions by 2025 is to be met, so that smaller construction businesses, such as those represented by Actuate UK and previously by the Specialist Engineering Contractors’ Group, can rely on receiving funds due to them and are no longer hamstrung in their ability to invest in the training, skills and technology that are essential to ensuring safety.
I hope the Minister will say something in his response about how the specific concerns expressed in the Hackitt report about the impact of poor payment practices such as retentions on safety and quality will be addressed by the Bill’s new regulatory regime, and indeed how his department will ensure that the guidance provided by its procurement advisory group will be implemented.
This Bill will be—or should be—crucial in changing the culture of the construction sector in relation to safety and quality. Perhaps the Minister will tell us why taking long-overdue action to mitigate the impact of retentions on safety should not be included in it as one of the unsafe industry practices that the Bill seeks to address.