That this House do not insist on its Amendment 2, to which the Commons have disagreed for their Reason 2A.
2A: Because the Government has announced that it intends to bring forward its own legislative proposals to address the issues mentioned in the amendment.
My Lords, I will speak also to the House’s Amendments 3 and 4, with which the other place has disagreed for its Commons Reasons 3A and 4A. Before I address the amendments agreed at the Lords Report stage, I would like to make a few comments about the overall importance of this piece of legislation. The Bill was introduced in the other place nearly a year ago today and we are moving closer to getting it on to the statute book. As there are a couple of issues to resolve, it is vital that we should remind ourselves of the fundamental purpose of the Bill. It is an important step in delivering fire and building legislative reforms. It is purposely short because it has been designed to provide much-needed legal clarification that the fire safety order applies to structure, external walls and flat entrance doors. What this will mean on the ground is that these critical elements will be covered in updated fire risk assessments and ensure that enforcement authorities can take action where necessary. In short, the current legal uncertainty will end.
I turn to Amendment 2 and Amendment 2B proposed in lieu by the noble Lord, Lord Kennedy. The Government remain steadfast in their commitment to delivering the Grenfell Tower inquiry recommendations, including those on the duties of an owner or manager. As such, the amendments are unnecessary. However, I thank him for his constructive engagement with me prior to this debate. I will be able to provide further reassurances to the House in respect of timing that he is seeking and look forward to outlining them in response to the debate.
I turn now to Amendment 3. I thank the noble Baroness, Lady Pinnock, for the constructive conversations that we have had regarding a public register of fire risk assessments, and I am grateful to her for not pressing her amendment again today.
At end insert “and do propose Amendment 2B in lieu—
2B: After Clause 2, insert the following new Clause—
“Legislative proposals relating to duties of owner or manager
(1) Within 90 days of the passing of this Act, the Secretary of State must publish draft legislation to require an owner or a manager of any building which contains two or more sets of domestic premises to—
(a) share information with their local Fire and Rescue Service in respect of each building for which an owner or manager is responsible about the design of its external walls and details of the materials of which those external walls are constructed,
(b) in respect of any building for which an owner or manager is responsible which contains separate flats, undertake annual inspections of individual flat entrance doors,
(c) in respect of any building for which an owner or manager is responsible which contains separate flats, undertake monthly inspections of lifts and report the results to their local Fire and Rescue Service if the results include a fault, and
(d) share evacuation and fire safety instructions with residents of the building.
(2) Within 90 days of the passing of this Act, the Secretary of State must publish a statement on a proposed timetable for the passage of the draft legislation mentioned in subsection (1).
(3) Within 120 days of the passing of this Act, the Secretary of State must publish a statement confirming whether the draft legislation mentioned in subsection (1) has progressed.””
My Lords, I draw the attention of the House to my relevant registered interest as a vice-president of the Local Government Association, the chair of the Heart of Medway Housing Association and a non-executive director of MHS Homes Ltd. In moving Motion A1, I will address all the Motions before the House today.
It is disappointing that the Government have over- turned the amendment passed by this House. The intent of our amendment was to make progress in implementing the recommendations made in the first phase of the Grenfell Tower inquiry. Our frustration, along with the frustration felt by many, has been that since the recommendations made in the first phase were published, progress has been extremely and annoyingly slow. Being told by the Government that in most cases we do not need legislation to make progress is in some ways even more frustrating because nothing has happened, which is again very odd. This is the first piece of legislation we have seen that will bring anything into force. Frankly, the victims and their families deserve better. People living in properties that are unsafe or blighted deserve better than that.
This led me to propose Motion A1, which proposes to insert a new clause into the Bill. What my amendment seeks to do is accept the Government intention to take action but to add some rigour and rigidity to the proposals with clear timescales for action. As I have said previously, this has all been too slow with no clarity about what the timescales are for action through primary legislation and through secondary legislation and guidance.
This morning I received a letter from the noble Lord, Lord Greenhalgh, which seeks to add some clarity to the timescales for action, and that is welcome. We also have the Government’s response to the consultation, which is helpful. It looks as if we are finally making some progress and I welcome that. It would be good to hear him, when he responds to the debate, set out the timescales for the actions the Government are proposing, and I look forward to that. That will be part of the official record of the House and the Government will be held accountable for the pledges that they make today.
My Lords, I speak to Motion C1 and Amendments 4B to 4E. I give notice of my intention to seek the opinion of the House when the time comes. I declare my interest in the register in that I, too, am a vice-president of the Local Government Association.
I first thank the honourable Members for Stevenage and for Southampton, Itchen, who originally prepared these amendments, as well as the signatories from all parties when they were tabled in the Commons. I also thank the right reverend Prelate the Bishop of London, who joins me in supporting it, and pay tribute to one of our colleagues, the Bishop of Kensington, who has worked very closely on the ground with victims of Grenfell and leaseholders.
Grenfell was an unmitigated tragedy brought about, it would seem, by institutional failings on multiple levels. The recent revelation that the cladding provider knew that it could result in tragedy and death is nothing short of a disgrace. It has been a tragedy for many lives: ordinary families have been ripped apart by this terrible event.
The Bill will deal with the problem of dangerous cladding by creating a quick and easy mechanism to force freeholders to remove dangerous cladding and other fire safety defects. That is undoubtedly a good thing and will, hopefully, protect against future tragedies, but I share the disappointment of the noble Lord, Lord Kennedy, that Her Majesty’s Government have not sought to address the severe adverse financial consequences that the Bill will create for leaseholders. In the Bill’s current form, whenever the fire service serves notice to the freeholder requiring remedial work to be undertaken, the freeholder will be able to force leaseholders to reimburse all the costs incurred. These costs are staggering.
At this point, I say that our hearts go out—I am sure we all share this—to all the people who are struggling. I have been inundated with emails, tweets and people contacting me who are at their wit’s end looking at what is likely to unfold in the next few weeks. Far from the Government’s estimated remedial costs of around £9,000 per leaseholder, depending on the terms of the lease and the work involved, a leaseholder could very easily be handed a bill of £50,000, payable within weeks.
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Government figures show that the average monthly cost of a waking watch in England is estimated at nearly £18,000 per building and around £330 per dwelling, rising to nearly £20,000 and £500 respectively in London. This is not to mention the cost of new alarm systems, ranging from £50,000 to £150,000 per block. How can this be fair or just? It was not the leaseholders who sold or fitted defective cladding; leaseholders are the innocent party. They purchased their properties in good faith, believing them to be safe. If the Bill passes unamended, it is they who will pay—not the cladding providers or the developers but hard-working ordinary people, forced to pay for defects that were deemed safe when they purchased their apartments.
I do not have the technical knowledge about how the Motion fits with the Bill and so on, and whether it would be better placed in a later Bill. What I do know is that we are faced with some immediate challenges. Any solution cannot be deferred until the building safety Bill, which could be as far as two years in the future. We have to try to do something now. Supporters of this Motion and I have argued that because this legislation creates the problem for leaseholders, it should likewise solve the problem. I acknowledge that there are some weaknesses in this Motion; it does not solve every problem for leaseholders. Even if it is passed, leaseholders will still shoulder ongoing interim fire safety costs. However, by preventing remedial costs from being passed on to leaseholders, a significant proportion of the financial burden placed on them should be eased. As one leaseholder said, “We need a solution so we can finally move on with our lives, something denied to us now for several years. We just want this nightmare to end”.
I hope that by passing this Motion, we can begin to end that nightmare and the anxiety plaguing the lives of thousands of leaseholders, allowing them to move on. The Bill solves the fire safety defects that lay at the heart of the Grenfell tragedy. The Government are absolutely right to do that and I am grateful for what they have done, but I believe they are morally wrong in their treatment of leaseholders in this crisis. By not including sufficient provision to protect leaseholders, a conscious decision would be made to impose poverty, possibly bankruptcy and certainly misery on thousands of ordinary people whose only crime was being aspirational.
Those responsible should be the ones who pay. Only the Government can provide the capital up front to pay for these works; only the Government can introduce levies on those responsible to claw back that money over the next few years. A great injustice is currently being done to leaseholders and a fair solution is needed, which is why I bring this Motion to your Lordships’ House.
My Lords, I draw the attention of the House to my relevant interests as a vice-president of the Local Government Association and a member of Kirklees Council.
Much has happened since the Bill was last debated in this House in November. It is already clear from the contributions to this debate today that this is an unresolved crisis of major proportions. I thank the Minister for the opportunities that he has provided to discuss the issues raised. The Government’s response has been to regard this as largely an issue for lease- holders and freeholders to resolve. Gradually, however, they have acceded to the principle that, without government intervention and funding, the problem will not be resolved.
The purpose of all the amendments in my name and that of the right reverend Prelate the Bishop of St Albans is to extend the principle already agreed by the Government. Amendment 4F in my name would extend the contribution that the Government make to cover not just the remediation but the extortionate service charges and higher insurance costs that are currently being levied on these leaseholders. This serious problem can be successfully fixed only with up-front funding from the Government, which can then be recouped from developers, construction firms and manufacturers.
The Government’s own estimate is that the total cost of remediation will be in the region of £16 billion. The buildings involved are not just in London but all across the country. Following the Grenfell tragedy, we now know that ACM cladding was affixed to blocks when it was known to be inflammable. As the cladding is peeled away, further serious building defects are revealed. The Government recognise this, as they have issued a directive to local authorities requiring an inspection of various features, including fire breaks, insulation and spandrel panels, as well as cladding. This is now much more than a cladding scandal; it has become a construction crisis.
My Lords, I declare my interests as a vice-president of the LGA and as a practising chartered surveyor. I have very considerable sympathy with all these amendments but, the matter having now been decided by this House, gone to the other place and now come back, it behoves us to consider all these matters with a degree of objectivity, despite the clear emotions that are involved.
With regard to Motion moved by the noble Lord, Lord Kennedy, I agree that it has taken far too long to deal with this matter, which has allowed the issue to grow in a way that should have been nipped in the bud at an earlier stage, but I realise the complexities of the issues, which I will address in a moment. On all these amendments, I must say at this juncture that I do not know which way I would vote; it will become apparent why as I proceed.
It goes without saying that I have the greatest possible respect for the right reverend Prelate the Bishop of St Albans and the powerful case that he makes for Motion C1 and, for that matter, the case made by the noble Baroness, Lady Pinnock, on the allied Motion C2. Indeed, every fibre of my being tells me that a great injustice has been visited on many innocent people as leaseholders and tenants in buildings affected by this Bill who have faced the burdens of past failings, delays and inaction, which they themselves may be powerless to deal with. It must be as if the whole system of property law and ownership has conspired against them. As a property professional, I feel that most acutely. It has been made worse, as I say, by the length of time that these problems have been gestating.
However, whatever my heart tells me on the grounds of ethics and justice, my professional experience tells me that these amendments would, almost inevitably, not achieve their aims or address the present or future fundamental issues. This Bill potentially affects a very wide category of property and tenure, not just high-rise blocks. The provisions of Clause 1 extend the regulations to any property comprising two or more separate units of accommodation. I ask noble Lords to contemplate just what that means in practice.
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I move on to Amendment 4, Amendments 4B, 4C, 4D and 4E proposed in lieu by the right reverend Prelate the Bishop of St Albans, and Amendment 4F proposed in lieu by the noble Baroness, Lady Pinnock. I recognise the concerns of your Lordships to ensure that swift action is taken to protect leaseholders from the significant remediation costs related to unsafe cladding and other historic building safety defects. We are all acutely aware of the full toll that this has taken on leaseholders and the pain and anguish that it has caused. I expect that we will hear a number of views during the debate on the important issue of remediation. However, this is a highly complex matter without a simple solution, and it cannot be resolved in this short Bill.
I make it clear now that we have a number of concerns about the alternative amendments, and I will set out my specific views on them at the end of the debate. I beg to move.
Motion A1 (as an amendment to Motion A)
In respect of Motion B, while I accept that the Commons can assert financial privilege and the need not to give any other reason, we must consider the subject of the amendment that was rejected and the circumstances that have led to this Bill, as well as the intention behind the amendment that the other place has rejected. We would have hoped to have got a little more than the assertion of financial privilege. This is about fire safety and reassurance for residents that the register is up to date, that it can be relied on and that it is publicly available and transparent so that sunlight on fire risk assessments will provide more reassurance. I hope that when the noble Lord responds to Motion A, he will provide a bit more clarity than just relying on financial privilege as expressed by the other place.
Motion C1, tabled by the right reverend Prelate the Bishop of St Albans, seeks to add to the Bill Amendments 4B, 4C, 4D and 4E. They would prohibit the owner of a building from passing on the costs of annual remedial works attributable to the requirements of the Act to leaseholders or tenants, except where the leaseholder is also the owner of the building. The amendments under the Motion tabled by the right reverend Prelate have my full support, and the Labour Benches will support him if he decides to divide the House. I hope very much that he will do so.
Leaseholders are victims and have done nothing wrong. They deserve to be treated much better than they have been by the Government. They have done everything right. They have bought their properties and are paying their mortgages. Now they are being penalised for the failure of others. Surely that cannot be right. The fact that their buildings have been covered in dangerous cladding has made their flats worthless. They cannot sell their properties, but they are still expected to pay their mortgages and other charges. They cannot get work done; they may be paying for a waking watch and in some cases the properties will have guarantees on them which need to be drawn down. There will be warranties for work done which need to be used. They have been paid for, otherwise they are literally not worth the paper they are written on.
We should all stand up to support leaseholders and tenants and get those who have done the work to accept their responsibility and put this right. The Government are failing leaseholders and tenants. Their actions are just not good enough and fall far short of what they promised.
I want to be clear. For the individual builder, contractor, company, warranty provider or insurance company, it cannot be right for people to wriggle out of their responsibilities. The Government need to take firm action. Supporting the Motions and amendments before the House today will be an opportunity to ask the Government to think again, and I hope we take it. I beg to move.
Inside Housing conducted its own private survey of 1,342 leaseholders. Its findings reveal a very different picture to that of Her Majesty’s Government. Among those surveyed, 63% of respondents faced a total bill above £30,000 for remedial costs and 15% faced a bill of more than £100,000. Of course, a few of these lease- holders may be well off, some will have disposable income, but most will not: 60% had a household income of less than £50,000, with only 8.7% reporting a household income of more than £100,000. In other words, this will primarily affect ordinary middle to working-class people.
In addition, 56.4% of those surveyed were first-time buyers. They have followed that life trajectory that many Conservative Governments have sought to promote by working hard, saving and purchasing a property. These are people with aspirations—something I totally support—yet nearly everything they have worked hard towards, over many years, could be taken away from them, as shown by the alarming 17.2% of respondents who say that they are already exploring bankruptcy options. I must remind the House that the costs mentioned above include only the remedial costs; they say nothing about the interim fire safety costs that leaseholders already incur.
Worse still is that some of the defects that are being exposed were in breach of building regulations even at the time of construction. The big question then is: who is going to pay? Currently, the Government are providing grants for the removal of cladding only and are restricting those grants to buildings of 18 metres or more in height. Yet cladding has to be removed from all blocks, irrespective of height. The Government have chosen 18 metres partly because they simply have no idea how many blocks there are that are lower than 18 metres. I have asked the ministry for the analysis of those risks to which the Minister will refer but have received no reply to date. Good decision-making is dependent on well-researched data, which is then shared for all decision-makers.
At the heart of this crisis are people who have done everything right and nothing wrong. They are innocent victims and have suffered enough. Imagine living in a flat with your family, knowing for three years or more that the home you saved hard to buy is a significant fire risk. That fact alone has left emotional scars on those leaseholders. Then imagine, having carefully budgeted, being faced with an additional service charge of several hundreds of pounds each month to cover the extras: waking watch, insurance and more. For some, the final straw is that you are then billed for the costs of total remediation. For individuals faced with these enormous bills, the choices are very limited.
Bankruptcy has already been the solution for too many. George is one such. He describes himself as a frightened leaseholder and says, “I have been informed that it will cost £2 million to replace the cladding and remedy the defects. That is £50,000 per flat. I’ll be bankrupt by the end of the year at the age of 28. The building has one grant, covering 10% of the costs.” Everything that he and others have worked and saved for is lost through no fault of theirs. It can lead to homelessness. Sarah lives in a flat in the Royal Quay in Liverpool. The normal year service charges for that block were £270,000; this year, the service charges are nearly £1 million. Sarah says that the defects are so numerous that the fire service may have to escalate from a compliance to a prohibition notice, which will shut down the complex. If that occurs, 400 residents will be made homeless.
Not surprisingly, given those examples, for some the stress is such that very serious mental illness, or worse, has followed. Hundreds of thousands of individuals and families are watching and waiting for the decision of this House today. They are willing us on to help to find a fair and just solution to a problem that is not in any way of their making, yet they are the ones who are being asked to pay the price. If the right reverend Prelate the Bishop of St Albans wishes to divide the House, as he has indicated, the Liberal Democrat Benches will support him. If, however, he chooses not to do so, then I will wish to test the opinion of the House.