To ask Her Majesty’s Government what assessment they have made of the (1) current, and (2) future, incidence of leaseholder bankruptcies attributable to remedial fire safety works and interim fire safety costs.
The Lord Bishop of Blackburn
My Lords, on behalf of my right reverend colleague, I ask the Question standing in his name on the Order Paper.
It is not possible to make such assessments because it will depend on a professional fire risk assessment of individual buildings and the extent to which costs might be met by or recovered from developers, contractors or building warranties. In addition, we are unable to assess the potentially wide range of individual factors that could lead to people either losing their home or declaring bankruptcy due to additional costs.
The Lord Bishop of Blackburn
I thank the Minister for his reply. The Institute of Residential Property Management estimated the cost of non-cladding fire safety defects as between £26,000 and £38,000 per lease, depending on the height of the building. These are huge costs that will bankrupt residents, even within the Government’s grant and loan scheme. Will the Government consider including these specific defects in the provisions to exclude ordinary upgrade and maintenance costs in their forced loan scheme?
My Lords, I point out that our approach prioritises action on the risks of unsafe cladding, which is what accelerates fire. The costs for remediating this, and the risk posed by it, are high. We are putting in unprecedented sums to cover those costs.
My Lords, when does the Minister think the Prime Minister will take action to honour the promise he made in the House of Commons, when he said:
“We are determined that no leaseholder should have to pay for the unaffordable costs of fixing … defects that they did not cause and are no fault of their own”?—[Official Report, Commons, 3/2/21; col. 945.]
My Lords, the Government have now committed more than £5 billion to the remediation of unsafe cladding. That will ensure that remediating the most risky element of a building will be covered in its entirety for those in high-rises and a substantial part of it for those in buildings of medium height.
My Lords, living in accommodation of whatever height with flammable cladding and other fire hazards is not the residents’ fault; they are the victims. Four years after Grenfell, does the Minister accept that natural justice requires speedy government action to right this appalling wrong and make these homes safe, with the bill being paid by those whose culpable negligence caused the problem in the first place?
My Lords, I accept that leaseholders are victims and recognise the need to strengthen redress so that we can go after the people responsible for the shoddy workmanship. That is something we will bring through as we announce the building safety Bill shortly.
My Lords, I would be grateful if my noble friend could update the House on any progress the Government have made to ensure that developers contribute to building safety remediation costs.
My noble friend is right. We believe that developers should contribute and make buildings safe without passing the costs on to leaseholders. There have been a variety of announcements by developers: Bellway has announced a cladding removal fund of £46.8 million, Persimmon one of £75 million and Taylor Wimpey has pledged £125 million. The Government have also announced a gateway levy on high-rises, as well as a developer tax that will raise £2 billion over 10 years.
My Lords, I refer the House to my relevant interests. Given the answer to the previous question, will the Minister provide any valid reasons at all for the Government expecting innocent leaseholders to pay the huge costs of remediating cladding and non-cladding fire safety defects, while those who created the problem—the developers he just mentioned—get off virtually scot free?
My Lords, we are very clear that we expect building owners to make buildings safe and not to pass on costs to leaseholders where possible. We have provided a substantial sum of money to ensure that the costs of cladding will be affordable for those in medium-rises and that those in high-rises will not have to contribute to the remediation of the most dangerous element of the building.
My Lords, the Government’s promise of a building safety Bill to reduce the possibility of future Grenfell-type disasters is welcome, but does the Minister agree that it is an acknowledgement of past national failure to ensure adequate fire safety standards, and that it should be the responsibility of the Government rather than of individuals to meet the cost of urgently needed safety improvements to existing property?
My Lords, I recognise that this crisis has built up over many decades and that the Government have a duty to step forward and help to a degree, but we must recognise that government funding does not absolve building owners of their responsibility to ensure that their buildings are safe. They should protect leaseholders where they can.
My Lords, the Government have said that they need £15 billion for the remediation of wall cladding. As the Minister rightly said, the Government are putting in £5 billion, but the levy they are seeking to raise from developers will provide only £2 billion over 10 years. It is capped at that sort of figure. When and how will the gap be filled?