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Mark Garnier (Wyre Forest) (Con) [R]
I beg to move,
That this House has considered the matter of protecting consumers from rogue builders.
I am conscious that we may have to go off for multiple votes before half-past 4, so I will crack on with what was going to be 45 minutes of the most magnificent speech—I will abridge it to just 42. I am missing out the bit where I was going to be nice about builders—I am afraid I will concentrate on the nastiness of builders.
I start by defining the area that I am keen to concentrate on, which is the smaller end of the market. Known as the repair, maintenance and improvement sector, or RMI, this is the area where we see many appalling stories of people’s lives being ruined by unwittingly taking on so-called dodgy builders.
There are countless stories in the press, and there are TV shows specialising in these types of problems. I could turn to any number of articles in the national and regional press that talk about cowboy builders. A relatively simple search for stories of rogue and cowboy builders reveals 1,500 such stories in the last five years alone, and that is just the stories that made the press. This is a very insidious problem.
Chat to almost anybody who has had any building work done to their home, and they will roll their eyes and admit that they have had trouble of one sort or another. But we do not have to rely on hearsay and the media to understand the problems and the implications. The Federation of Master Builders conducts surveys to see what the effect is on the RMI market, and a recent poll of homeowners discovered that one in three were put off having work done on their home because of the fear of being ripped off. That equates to a possible £10 billion of lost economic activity.
Monica Harding (Esher and Walton) (LD)
I would like to shine a light on one of those many stories. My constituent in Esher and Walton paid over £16,000 for a kitchen remodelling that was never delivered, and the same company is alleged to have defrauded other constituents, including one this year who lost £20,000. When fraud occurs on this scale, it is theft from honest people, but consumers find that the civil courts are slow, complex and costly. Does the hon. Member agree that the Ministry of Justice should ensure accessible routes to redress, which may be small claims courts or an ombudsman scheme, so that consumers can get justice quickly?
Mark Garnier
I will talk about that in my speech. The fundamental problem is that, at the moment, the only course of redress is through the court system, and it is not good enough.
The FMB does a lot of work in this area, and it is worth looking at some of its statistics. Thirty-seven per cent of customers report unreliability, and many of them cite apparently unqualified operators. Nearly a quarter—that is 25%—of all customers have lost money to rogues, with losses averaging £1,760, but in many cases the amount is far higher. The national loss is horrific. The FMB estimates that, over five years, homeowners have lost an astonishing £14.3 billion to unreliable builders, putting an astonishing burden on the housing market and households. It turns out that young adults are more at risk, with 33% scammed by rogue traders found via social media.
The consumer is not the only victim of rogue or cowboy builders. Within the industry, many find themselves a victim of the same problem. Subcontractors find they are not paid, and it is the same for merchants. Plant hire companies are frequently the victims of theft and abuse of equipment. Alarmingly, health and safety is a low priority among many small and medium-sized building firms operating in the RMI market.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate, and he is absolutely right. In Northern Ireland, consumer protection against rogue builders involves preventive measures, official reporting channels and legal recourse through the Consumerline service, trading standards and the small claims court. The reality is that those protections are difficult to navigate, and they are often off-putting for people who are not used to filling in forms and writing things out. Does the hon. Member agree that there must be a more straightforward approach? People, who are often vulnerable and need support, should not have to jump through hoops.
Mark Garnier
The hon. Gentleman is absolutely right. The current system does not satisfy people in any way, shape or form. Also, there is an inequality of risk, which I will come to in my speech.
Although large firms working on major commercial and civil engineering projects have embraced health and safety legislation, a blitz of small refurbishment sites by Health and Safety Executive inspectors in 2016 found that a stunning 49% of sites fell below the standards set for compliance with health and safety requirements. More alarmingly, that cavalier attitude to health and safety reveals the potential problem of cowboy builders leaving dangerous sites. When someone has an extension built, might they be risking life and limb when they climb those stairs? Poor-quality building results in not just shoddy work, but dangerous and potentially fatal work.
Rogue builders have an effect beyond their own unhappy activities. By undercutting reputable, high-standard builders that make up the majority of the market, they force them to cut their margins. Price competition is fine, but not when a worthwhile and reputable SME builder is competing against someone with no care for safety, honesty or customer satisfaction. Given that the RMI market is dominated by occasional customers—we are not doing this very often—it is quite likely that the key element of choice is price. Unhealthy price competition drives down standards, even if reputable firms are unhappy being forced to cut standards to compete.
In an extreme example of the problem—this is an important point—I recently met Andrew Bennett, who had engaged a local firm in Liverpool to refurbish a six-bedroom property that he owned—a job that was to be worth around £100,000. He checked out the firm and was happy with references and testimonials. He engaged the firm, but it turned out that the work was dangerously below standard. When he started to seek redress, he discovered that the company in question was not what he had been led to believe. It was a rogue builder passing off as a well-known, reputable company. Moreover, this dubious company had nine county court judgments against it and therefore had no money to pay the award to Mr Bennett when he won his case.
That company was passing off as another. It was seeking to take money off an individual customer by deliberately misleading him, and it failed to deliver the work contracted by that customer under the cover of misleading him—fraud, by any other name, or by the actual name. Mr Bennett went to the police, who told him that it was a civil matter. He tried all the avenues available to him to get this individual bang to rights, but to absolutely no avail. The company continues to rip off people, in full knowledge of the local law enforcers, trading standards, the local council and planning department, and multiple victims of its activities.
Ms Julie Minns (Carlisle) (Lab)
I thank the hon. Gentleman for securing this important debate. One of my constituents was ripped off to the tune of £19,000 when the builder walked off the job part-way through. However, when they went to trading standards and the police, they were told that, because the work had begun, it was a civil and not a criminal matter. Does the hon. Gentleman agree that more needs to be done to protect our constituents who are caught by that loophole?
Mark Garnier
Yes. It is shameful how these builders can get away with it—it is absolutely astonishing. By the way, this campaign has been going on for a number of years. It is very good to see, behind the Minister, the official who has worked with me in the past, although we have yet to achieve what we want to achieve.
How do victims of rogue builders seek redress? The answer, as we know, is not simple. They go to trading standards in the first instance but, with a rogue builder being, by definition, a rogue, the sanctions available are weak at best. Ultimately, the homeowner or small business owner who finds themselves a victim has no recourse other than the courts. However, the reality is that contract law simply does not work for people with problems above the small claims limit but below around £1 million.
The reality is that anyone can make up a fictitious bill that they want us to pay, and we have to negotiate. To challenge or defend that type of bill requires a commitment of between £100,000 and £200,000 in legal and court fees to prosecute a court case, and in professional fees to demonstrate the loss. I spoke to any number of friends and colleagues with very senior legal experience, and everyone said that this type of problem has absolutely nothing to do with justice and everything to do with negotiation. One even said that it is like being mugged and then being charged for the knife, with the backing of the law. For many reasons, our legal system is so clogged up that it serves no one properly, allowing it to be abused by rogue traders.
Mr Connor Rand (Altrincham and Sale West) (Lab)
The hon. Gentleman speaks powerfully of the devastation that can be caused by rogue builders, as families in Altrincham and Sale West have experienced. Many have been ripped off by Frank Deary, a rogue builder who has taken over £1 million for work that he has never finished. He repeatedly liquidates his various building companies, making it extremely difficult for victims to recover any money, before he starts all over again with a different company name popping up. Does the hon. Gentleman agree that this case, and so many cases that we all see in our constituencies, shows the need to crack down on rogue builders and improve customer protections?
Mark Garnier
The hon. Gentleman has probably read my speech, as that is the core of it. The legal problem is bigger than just failing to support victims through the court system. Rogue builders know the legal system works in their favour. There are builders who create fictitious bills or charge fictitious costs for work not carried out—I have seen that as a victim myself. I contracted a builder to renovate a much-loved family home, and they failed to do the work in time, which was a breach of contract. They rattled on for far too long, they did not do the whole work and, at the end, they put in a massive, fictitious bill. Our quantity surveyor reckoned there was an outstanding balance to pay of perhaps £6,000, but they put in a bill for £100,000.
In the end, everybody said, “You have to negotiate.” We negotiated a final settlement, which was multiple times in excess. This is a fundamental problem. We do not get redress, and we have to negotiate even if we know the negotiation is bogus.
Tom Hayes (Bournemouth East) (Lab)
I thank the hon. Gentleman for securing this debate. There are lots of excellent and reliable builders in Bournemouth East, but I am thinking of my constituents Andrew and Heather, who have really suffered at the hands of a rogue builder whose contact details they were unable to access. They got in touch with me because of their concern about their circumstances. Does the hon. Gentleman agree with me, and with them, that the domestic building industry needs strong licensing and regulation? Without that, we will not stop cowboy builders exploiting my constituents.
Mark Garnier
The hon. Gentleman makes exactly the right point. We need a balance of risk, and I will come to that point later.
Consumers of repair, maintenance and improvement building services have no protection whatsoever. There is no practical protection for consumers to avoid the highly risky, unbelievably expensive and emotionally draining prospect of prosecuting contract law. Indeed, subcontractors working on my home were also victims of the rogue builder because they were not paid, either. It is extraordinary that consumers are unprotected. When we think about the whole process of refurbishing a home or building an extension, it looks even more astonishing.
The proud homeowner seeking to improve their home will go to an architect regulated by the Architects Registration Board. They might contract a quantity surveyor regulated by the Royal Institute of Chartered Surveyors. They will probably need to borrow money, so they might approach a mortgage broker regulated by the Financial Conduct Authority. They will get help with a mortgage provided by a lender—again, regulated by the FCA, and possibly the Prudential Regulation Authority—with advice from a solicitor regulated by the Solicitors Regulation Authority. The money will then be deposited in a bank, again regulated by the FCA and the PRA.
The whole process is laden with consumer protection right up to the point where the money is handed over to someone with absolutely no regulation, possibly no qualifications, and no protection mechanism for consumers. As I said before, the problem gets worse, but it is worth repeating. The victim may well prosecute the case in court and win both damages and costs. But at that point the rogue builder goes bust with no assets, as pointed out by the hon. Member for Altrincham and Sale West (Mr Rand), and starts a new business the following day to continue the process of ripping off consumers. Meanwhile, the victim’s costs are unpaid and run into hundreds of thousands of pounds. The consumer ends up winning the moral victory but losing an enormous amount of money, while the rogue builder goes on to do the same again without any consequence.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
As well as the financial cost, there is also an emotional cost. A constituent got in touch with me after trying to resolve an issue with leaking roof insulation. When we got involved, it took us eight months and 97 emails to get the builder back out to repair it. There is an emotional impact on the whole family. Does the hon. Gentleman agree that this is an intolerable burden to put on people, and that we need to do something more?
Mark Garnier
Absolutely. Not only that, but if we think about the consequences, those 97 emails could have been sent for any one of the 100,000 constituents that we each have. We should not be doing this, and there should be a mechanism to sort it out.
The important reality of all this is that there is no disincentive at all for the cowboy builder to present fictitious bills and do bad work. While the consumer must engage in a risky legal process, the rogue builder can game the system with no jeopardy whatever. As we learned from Mr Bennett's story in Merseyside and the many other people who contacted me, the police will not investigate a case with regard to fraud and rogue builders, as they deem it a civil matter.
So what is the solution? How do we protect honest builders, subcontractors, merchants and, importantly, our constituents and consumers? How do we redress the balance of risk so that it does not favour the rogue builder but gives equal weight to both consumer and builder? The builder is not always in the wrong, so the solution must be balanced. Builders may occasionally need to be protected from rogue customers. The answer must lie in a scheme of regulation and licensing. In essence, what I am seeking to do—I have had a couple of presentation Bills on this topic—is get the Government to come up with a scheme of compulsory licensing for SME building firms working in the renovation and domestic improvement space. We do not know what it will be, but we need a system in which there is an equivalence of risk on both sides. There must be something that the builder as an individual can lose if he or she is found not to be doing their job properly.
My experience in this area has been with financial services and regulatory reform. Although I am not proposing anything remotely as complex as the FCA or the PRA to regulate builders, there is more than one important carry-across from financial services regulation. The first is that we do not want regulation to be a burden on the taxpayer. A licensing scheme must be self-financed through licensing fees: the building firms must pay for it.
Rules for having a licence must be straightforward. Importantly, no firm or individual should be allowed to offer services directly to customers without a licence. That in itself would result in the wider building industry policing the market. If a builder knows that somebody else is a dodgy builder, it is in their interest to report them. Mortgage lenders would require evidence that money will be spent on a licensed firm. Architects and surveyors acting as project managers would need to see licences to engage a building firm in the first place, so consumer would know what they are getting. Consumers would be able to check the builder on the regulator’s website, in the same way that they can check their pension adviser on the FCA register. The regulator could be TrustMark, which already offers voluntary regulation. There should a code of conduct covering honesty, safety and quality of work. Failure to comply should have a series of sanctions, with the ultimate sanction of the loss of licence.
An option could be a compensation scheme. The Financial Services Compensation Scheme is an example of how consumers who have lost out as a result of poor practice can be compensated for their loss from a scheme financed by levies placed on licence holders in the relevant sector. The double effect is that the consumer gets their losses covered while the industry as a whole is incentivised to keep an eye on each other. An ombudsman would be able to assess consumer loss without the need to engage expensive and lengthy legal and professional experts to defend against bogus builds or to challenge poor work. These proposals aim to end the decades-long history of consumers who have been ripped off in one way or another by shoddy rogue builders.
I am conscious of time, Ms Furniss, but I want to acknowledge that the Government have started to resolve some of these issues. A New Homes Quality Board has been set up to ensure that new homes are built to a certain standard. That is a welcome development. The fact that it has an ombudsman demonstrates that the Government and I are probably thinking along the same lines in a broad sense, but the New Homes Quality Board is targeted specifically at the new homes market. Given the Government’s target of 1.5 million new homes, it will have its work cut out. Importantly, it is not designed for the RM&I sector, which remains wholly unregulated and unsupervised. That is what the Minister must concentrate on.
Many people agree that this problem in the RM&I sector is beyond redemption. The Federation of Master Builders report on this subject in 2018 said that even construction firms themselves agree that a compulsory licensing scheme is necessary. The industry wants it too: 77% of SME builders and 78% of consumers agree with the FMB’s proposed licensing scheme.
Enough is enough. I have a few more words about my engagement so far. Unfortunately, the Housing Minister is on his feet in the main Chamber talking about the Planning and Infrastructure Bill. I was looking forward to beating him up a bit, because he has been less than brilliantly helpful. None the less, it is very good to see the Minister from the Department for Business and Trade in her place. I look forward to hearing her helpful words about how the Government will introduce legislation to ensure our constituents are not ripped off endlessly by these wretched builders.
Gill Furniss (in the Chair)
I am keen to bring this debate to a conclusion before the first of many expected Divisions is called, with all participants having had a satisfactory opportunity to contribute to it. Mr Garnier and the Front Benchers have graciously agreed to watch the clock, curtail their remarks and be very succinct. I ask all of you to be extremely brief with speeches and interventions.
I expect the first Division at 4.15 pm. To help me to enable all those who wish to contribute to the debate to do so, please stand now that Mr Garnier has moved the motion and made his speech, so that I can calculate accurately the initially informal limit on speeches that I will strongly encourage.
Several hon. Members rose—
Gill Furniss (in the Chair)
There will be a limit of four and a half minutes for each speech. I call Sarah Hall.
Sarah Hall (Warrington South) (Lab/Co-op)
Thank you; it is a pleasure to serve under your chairmanship, Ms Furness.
I am grateful to colleagues for securing a debate on this issue, because it is something that I am hearing more and more about in Warrington South. When people come to see me about it, they are usually exhausted and upset. Their home is supposed to be the safest place in their life, but instead they are living in chaos. Indeed, this is such a widespread problem that there are now entire TV programmes about cowboy builders, and newspapers and broadcasters regularly produce guides about how to spot and avoid them.
One constituent came to me after doing everything that a sensible person would do. They found a firm on Checkatrade, read the reviews, checked the company’s details and were confident they had found a reputable business. They were not naive; they were careful and did their due diligence. However, once the work started, their home was devastated. The whole roof came off. Rooms that they relied on day to day, including the shower, were in a horrendous state for months. They ended up spending around £60,000 to put things right.
Trading standards officers were helpful and saw the case through the legal process. Eventually, the rogue builders received a suspended sentence for what they had done to three different families. But even then, the system did not come close to putting things right. The company had claimed to have insurance, but it did not. Under the Proceeds of Crime Act 2002, the judge had to set a limit of £50,000 to be split between all three victims. My constituent will only get back a fraction of what they lost, and frustratingly they still have not received the compensation they are owed. When we talk about consumer protection, we must be honest—it simply did not work for my constituent.
Members from across the House have described similar patterns of behaviour in their own constituencies. When the same individuals take thousands of pounds, leave homes unsafe and move straight on to the next victim, it looks and feels like fraud, yet too many people are still being told that it is a civil matter. If we are serious about protecting consumers, we need clearer lines, so that the police understand when this issue becomes criminal and not just contractual. We need enforcement agencies with the resources to intervene earlier, and we should take a proper look at whether an affordable and proportionate licensing or accreditation scheme for builders would help to stop repeat offenders from slipping through the net. Most of all, we need a system that recognises what is at stake. Rogue builders are ruining homes across the country, yet victims are still being left to fend for themselves.
I hope that my hon. Friend the Minister will look closely at the gaps that this case has exposed in enforcement, compensation and basic protection, so that what happened in Warrington South does not keep happening to families across the country.
Sir Julian Lewis (New Forest East) (Con)
This is an issue that is crying out for a solution. In my opinion, there are two principal remedies that need to be applied to the plague of rogue builders: criminalisation of those builders who are shown to have fraudulently fleeced their innocent victims; and a requirement for all builders to be registered with and licensed by a professional body, together with an insurance scheme to remedy failure or harm, as my hon. Friend the Member for Wyre Forest (Mark Garnier) has already explained in his admirable opening speech.
I have decided, on balance, not to identify the specific rogue builders and their victims to whom I shall refer today; however, I do not rule out doing so in the future. My first case study concerns Graeme, a constituent of mine who paid more than £1,800 to a builder in 2023. Although the same builder had done satisfactory work in the past, on this occasion he gave a succession of excuses for not turning up before ceasing to respond at all. A solicitor advised Graeme that it would cost more than any sum likely to be recovered for lawyers to be involved, and suggested contacting the police.
Graeme writes:
“I was born at the very end of the 1960s and, to me, if someone deprives me of my money, it is theft or even fraud.”
As someone born at the beginning of the 1950s, I heartily endorse that view, but the police responded that stealing £1,800 from Graeme in that way did not meet
“the threshold for theft or fraud”.
Similarly, his bank was not keen to help once it knew that the builder had previously completed satisfactory work for Graeme.
Next, he found that trading standards could be contacted by an aggrieved individual only via a charity such as Citizens Advice, which also came as news to me. His CA recommended the money claims court; Graeme followed its advice and eventually obtained a county court judgment for £1,800 plus costs and interest. Even then, it took action at a higher court level for bailiffs to be appointed. They extracted a few weekly payments of a fraction of the sum stolen before giving up the ghost.
One might say that it could have been particular circumstances or misfortune that led the builder to let down his client—although that is no excuse for keeping his money. However, Graeme managed to establish directly that he had treated another victim in precisely the same way. Indirectly, Graeme heard of several others who had suffered in similar fashion. He was forced to conclude that, irrespective of a pattern of dishonesty towards multiple victims, the police still regard such behaviour as “a civil matter” and a “breach of contract”. Thus, with criminal prosecution closed off, all that remains is the costly, risky and often ineffective civil route. To date, Graeme has received a paltry £260, with more than £2,040 awarded by the court outstanding.
While Graeme rightly feels aggrieved by the injustice of his situation, my second constituent, Malcolm, has had his own and his family’s life totally upended by a truly nightmarish experience—one of the worst cases I have had to deal with in 28 years as a Member of Parliament. After a career of admirable public service in the Royal Navy and as a fireman, he has lost huge sums of money from his life savings and pension schemes at a time when a close relative with stage 4 breast cancer was meant to be benefiting from his support. It was for that purpose, I believe, that he commissioned the alterations—primarily converting a garage into extra ground-floor rooms—to his home in the first place.
Malcolm selected a building firm that he chose from a respectable trade recommendation website, where 5-star ratings for it were recorded. He agreed to pay about £25,000 for, supposedly, three weeks’ work to be undertaken while the family was on holiday in 2022. Despite an extra week’s delay, they returned to a scene of incomplete and utterly shoddy work and, in some respects, dangerous disorder. Indeed, Malcolm injured himself quite badly in a fall at the property that he attributes to this.
In addition to the very large payment made irrecoverably to the rogue builder, it cost Malcolm a horrifying £45,000 more for remedial works, which he had to undertake to make his home safe and inhabitable again. The trade recommendation website, which he thought had validated the rogue builder, offered its maximum level of compensation —a modest £1,000. Later, he discovered that the builder had no gas safety qualification, as he had falsely claimed.
Malcolm succeeded in communicating with trading standards, which indicated that it would be helpful if a pattern of similar construction disasters could be established. Malcolm therefore turned investigator, and discovered several other families in my constituency and in nearby Southampton. He calculated total losses caused by the same rogue builder to be at least £200,000. One victim, a lady living with multiple sclerosis, was left without a functioning toilet.
The police, nevertheless, still insist that the threshold for criminality had not been reached. If so, that threshold needs to be changed, and changed substantially. Despite correspondence from me to Hampshire county council pointing out the multiple victims, the apparent evidence of companies being repeatedly set up and dissolved by the rogue builder—as we have heard from another hon. Member—and his not infrequent changes to his own name, nothing effective has been done to punish or constrain him in any way.
As stated at the outset, there are two fairly obvious remedies. First, if the police are right that the current state of the law prevents such devastating and ruthless misbehaviour reaching the threshold of criminality, that threshold must be repositioned by legislation to include it. Secondly, like other skilled professions, builders must be licensed before being allowed to operate. The good news is that, as we have heard, the Federation of Master Builders is ready and able to undertake this vital role. That must be coupled with an insurance scheme to which builders will contribute to enable redress where appropriate and where standards are breached. Rogue builders can ruin lives; now is the time to banish that evil.
Amanda Martin (Portsmouth North) (Lab)
It is a pleasure to serve under your chairship, Ms Furniss. I am grateful to the hon. Member for Wyre Forest (Mark Garnier) for securing this important debate on protecting consumers from rogue builders—an issue that affects thousands of families, honest tradespeople and small businesses across the country.
In my constituency I have spoken to homeowners left heartbroken and out of pocket after rogue traders walked away leaving unfinished work, and skilled local tradespeople who tell me they are being undercut by those who cut corners, dodge taxes and disappear when something goes wrong. Every year, hard-working homeowners lose an estimated £1.4 billion through rogue traders, not to mention suffering emotional stress, anxiety and shattered trust. At the same time, those rogue operators undermine our legitimate, qualified tradespeople who play by the rules, pay their taxes, insure their work, and uphold professional standards and training. They damage the reputation of the entire construction and home improvement sector, making it harder for honest builders to win work and for consumers to know who to trust.
As in many parts of the country, residents in Portsmouth have been affected by rogue builders who exploit trust and cause real distress. The crimes often target vulnerable people, such as the elderly, or families just trying to improve their homes. In one case in my city, an elderly couple paid thousands of pounds from their pension savings for essential roof and patio repairs, only to be left with unsafe and unfinished work. They were forced to pay even more just to make their home liveable again. In another example, a family hired a builder to renovate their garage; instead of safely removing the asbestos roof, the contractor left open bags of hazardous material in a shared alleyway, putting neighbours and children at risk. The family had to pay for specialist clean-up and repairs, adding more financial strain to their emotional stress and worry.
In Copner, an area of my city, a local family’s home extension turned into a nightmare when the builder abandoned the project halfway through. He was meant to put a new kitchen in, but it became an unsafe shell that failed building inspection after building inspection, leaving the family out of pocket and living with disruption for years. Other residents across the city have been scammed by traders using multiple companies to take deposits for work that they have never finished—or, indeed, never started.
Those cases remind us that rogue builders not only cause financial loss, but damage confidence, safety and peace of mind. They also highlight the importance of checking credentials, avoiding doorstep deals, reporting suspicious activity and gaining our tradies from social media. Concerns have been raised about trade websites, but I commend Checkatrade and other industry bodies that are working to raise standards. Checkatrade, for example, has blocked 850 rogue traders from joining its platform in this year alone. It has also formed a primary authority partnership with trading standards, helping to strengthen consumer advice and set new benchmarks for best practice.
Amanda Hack (North West Leicestershire) (Lab)
A constituent of mine recently shared that she hired a builder who took payment for professional services—but everything about the work was fraudulent. She told me that she felt abandoned by a black hole of referrals, despite multiple agencies confirming that it was actually a criminal matter. The work is being investigated by a neighbouring trading standards, but that is taking far too long. Does my hon. Friend agree that the process of reporting and getting resolution has to be speeded up?
Amanda Martin
I absolutely agree. Voluntary measures only go so far, and the Competition and Markets Authority must step up to enforce this work.
The lack of consistent action against non-compliant trade recommendation sites undermines confidence, creates an unlevel playing field and ultimately hurts the very people we are here to protect—both consumers and legitimate businesses.
That brings me to another issue I have been campaigning on: tool theft. Just as rogue builders threaten trade in the industry, tool theft threatens its very foundation. Every van stolen, and every break-in on a building site or driveway, means another tradesperson unable to work, another small business losing its livelihood and another family struggling to make ends meet. More than 1 million tool theft incidents have occurred in the past five years. Tool theft costs the economy hundreds of millions, and fuels the black market and more rogue builders. I have been calling for a national register for stolen tools, mandatory marking and traceability requirements for high-value tools, and stronger police action and sentencing for repeat offenders. Protecting tradespeople from crime goes hand in hand with protecting our consumers from rogue builders: both rely on trust, fairness and accountability.
I urge the Government to take four steps: first, strengthen the enforcement of consumer protection laws and ensure that—
Munira Wilson (Twickenham) (LD)
It is a pleasure to serve under your chairmanship, Ms Furniss. I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing this debate, and for his record of campaigning on this issue. I also recognise the Federation of Master Builders for its important work in this area. I was proud to be at the launch of its “Licence to Build” report earlier this year.
Like many other hon. Members, I have heard regularly from constituents who have gone through horrendous experiences with rogue builders, and I have seen people in tears in my surgeries after suffering the effects. One couple who came to see me had their home turned into a building site when builders left trenches dug up around their house, having taken £36,000 from them. When the couple were asked to pay double that cost and they refused to do so, the builders disappeared without trace, leaving the work undone and parts of the couple’s home unusable and unsafe. Another constituent’s builder continually demanded further payments for months before abandoning the work unfinished. The mental toll on the victims is hard to explain until we meet some of these people.
These builders, if we can even call them that, are simply allowed to get away with it because there is so little regulation. As we have heard from other hon. Members, rogue builders often close down their companies and re-establish under a different name, which makes it incredibly difficult for trading standards to go after them. Over half of UK homeowners, 55%, have had a bad experience with a builder, so this is not a small or hidden issue—and, as other hon. Members have said, it gives other, excellent builders a poor reputation. It is not fair on the rest of the industry.
Consumers are left with limited options, limited support and limited agency. Our system of redress is overwhelmed, underfunded and extremely complex. The small claims courts, trading standards, the Consumer Rights Act 2015, and the Competition and Markets Authority all have a role to play, but they are all far too weak. When homeowners have spent their savings or borrowed huge sums of money to improve their home, as is their right, they do not have money left over to chase people through the courts. There is no ombudsman, but how could there be when there is no regulation to enforce?
I urge the Minister to take back to her Department the need to be much more ambitious in this area. This problem is not just societal, but economic, given that the public have lost some £14 billion in five years to rogue builders. As the hon. Member for Wyre Forest said, this problem depresses demand because many people are too afraid to do extension or home improvement work. I hope that the Minister will give strong consideration to a licensing scheme that could be administered and regulated by the Building Safety Regulator. If she concludes that that is not feasible, for whatever reason, what other measures are Ministers willing to consider to strengthen the justice system in order to protect consumers and make it much easier for them to get redress from the rogue house builders that cause misery up and down the country?
Andrew Cooper (Mid Cheshire) (Lab)
It is a pleasure to serve under your chairmanship, Ms Furniss. I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing this debate. We have heard some harrowing stories from right hon. and hon. Members from across the Chamber. I am pleased that the right hon. Member for New Forest East (Sir Julian Lewis) was able to share his story in full; what his constituents went through was utterly outrageous. I want to focus on the other end of the market and highlight a deeply troubling issue that has left families in my constituency and across the north-west region paying the price for the reckless and irresponsible actions of a house builder that failed to meet its most basic obligations.
The collapse of Stewart Milne Homes North West England in January 2024 exposed a glaring loophole in our housing system, which allows developers to sell homes without first securing the legal agreements that guarantee the adoption of essential infrastructure such as roads and sewers. In my constituency, three estates built by Stuart Milne were completed years ago but their infrastructure was never legally adopted. The streets were not adopted by the local authority, nor the sewers by United Utilities. Why? Because the developer failed to secure either the necessary bonded section 38 agreement, the section 104 agreement, or both. The result is that homeowners who purchased their properties in good faith are now told they must foot the bill to bring roads and sewers up to standard: we are talking about thousands of pounds for infrastructure that should have been properly delivered and adopted from the outset.
In Middlewich, residents on one estate had been waiting for a decade for the adoption of their sewers. It has been up to residents themselves to navigate the complex process of securing sewer adoption. After years of persistence, significant personal investment and tireless effort, their determinations have paid off, and the sewers on their development are now fully adopted. I pay particular tribute to Claire Bertram for seeing this through—but this situation is not just unfair; it is unacceptable. People buying a home should not have to become experts in planning law or infrastructure adoption. They should be able to rely on a system that protects them from exactly this kind of exploitation.
We need urgent reform to close those loopholes and prevent that situation from happening again. It must be a legal requirement that no home can be sold unless the infrastructure that it relies on—roads, sewers, drainage—is fully secured through binding adoption agreements. This is not a radical proposal; it is a basic standard of consumer protection. We already have a legislative tool: section 42 of the Flood and Water Management Act 2010, passed by the previous Government, which provides a mechanism to ensure that sewer adoption is properly regulated. It is time to activate and enforce this provision through secondary legislation. We also need a parallel mechanism for highways—one that ensures that developers cannot shirk their responsibilities and leave communities in limbo.
This is about restoring trust in the housing sector. Families should not be punished for a developer’s failure. We need stronger regulation, better oversight and a clear legal requirement that no home can be sold unless the infrastructure that it relies on is secured, adoptable and protected by law. Only then can we prevent this kind of injustice from happening again.
Tom Gordon (Harrogate and Knaresborough) (LD)
It is an honour to serve under your chairship, Ms Furniss. I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing this important debate.
Over the last year, I have been campaigning on behalf of homeowners affected by faulty spray foam insulation installed under the previous Conservative Government’s green homes grant scheme. The aim was to improve the energy efficiency of homes across our country by offering households help to make their homes warmer, greener and cheaper to run. Many homeowners used the scheme to fund the installation of spray foam insulation. However, in a number of cases the installation was done incorrectly, causing moisture to become trapped, creating structural issues such as roof timber decay.
Under the green homes grant, as with other Government retrofit schemes, homeowners were told that only TrustMark-approved contractors could carry out the work, yet we have seen substandard and unqualified contractors admitted to the scheme, carrying out poor-quality work and then disappearing when problems emerge, leaving homeowners to deal with the consequences. These cases have exposed a growing problem: the rise of rogue builders and traders operating under the banner of Government assurance.
Although spray foam may seem niche, that case is not isolated. It is a symptom of a much deeper failure in oversight and consumer protection. The Government’s own quality assurance mechanism, TrustMark, as the hon. Member for Wyre Forest mentioned, is administered by the Department for Business and Trade, and it has failed in its most basic duty. TrustMark was established to ensure that only qualified and competent contractors were permitted to carry out work under Government-funded schemes, yet here we are with hundreds, if not thousands, of homeowners left with defective installations.
Recent announcements about improper installation under the Great British insulation and ECO4 schemes have further highlighted this failure. To put it simply, TrustMark is not fit for purpose. If the Government are to tackle the issue of rogue builders, they must start with those that they endorse under their own schemes. The Department for Business and Trade must work more closely with the Department for Energy Security and Net Zero to ensure that future schemes are properly monitored, contractors rigorously vetted, and consumers protected. That must include a thorough evaluation of TrustMark’s capacity to deliver the effective consumer protection that it ought to offer. At present, it is failing to provide meaningful quality assurance or to keep rogue builders out.
What is worse is that these failures have created a second wave of exploitation. Rogue traders are now targeting households that had any form of spray foam insulation and offering to remove it, at great cost, even where the insulation is properly installed and functional. In many cases, these removals, which are completely unnecessary, cause further damage to the property, leaving homeowners with even greater costs.
These vulnerable consumers have been exploited not once, but twice: first by unfit contractors operating under a Government-endorsed quality scheme, and then by opportunistic builders and traders exploiting the chaos that that failure has created. As my hon. Friend the Member for Twickenham (Munira Wilson) mentioned, often the companies are then wound up, leaving people without a mechanism or a person to seek redress through. This is precisely why stronger oversight is needed.
The Department must work with TrustMark to ensure that contractor vetting, auditing and enforcement are properly co-ordinated, leaving no room for unsuitable contractors to operate under the banner of Government assurance. Secondly, there must be clear and accessible routes to redress. Homeowners should not be left to navigate complex complaints systems or take costly legal action against builders who may already have vanished. While TrustMark offers a dispute resolution service, those who have tried it will know how difficult it is to access and how rarely it delivers meaningful outcomes.
I therefore urge the Minister to take up this issue seriously. TrustMark must be reviewed, consumer protections must be strengthened, and we must clamp down on rogue builders who exploit public funds and private households. Rogue builders are not just a nuisance; they are a serious threat to consumer confidence, public spending and the integrity of the housing sector. It is time we treated them as such.
Clive Jones (Wokingham) (LD)
It is a pleasure to serve under your chairship, Ms Furniss. I thank the hon. Member for Wyre Forest (Mark Garnier) for securing this important debate.
A house builder and social housing provider have treated some of my constituents disgracefully. Three families with children bought shared ownership homes in Wokingham. One family refused to move in due to mould and damp in the house and the other two found mould all over the cupboards. It has been found that the houses were missing a crucial damp-proof membrane and course, both vital to keeping moisture out of the house.
There has been a real lack of communication and empathy from the company and housing provider, and they have ignored the residents’ claims for many months. After my intervention, the social housing provider agreed to decant the residents while remedial work is done to the houses. It is now backtracking on that commitment, and it has taken far too long for the builder and the social housing provider to acknowledge fault, which has had a serious toll on my residents. It is clear that the builder and social housing provider cannot be trusted to build and maintain quality housing going forward.
I have one question for the Minister: does he agree that house builders and social housing providers must be held to account, and that local authorities must be able to end relationships with underperforming house builders and social housing providers to protect residents?
Gill Furniss (in the Chair)
I call Ben Maguire. I ask you to be quite swift, because we understand there may be Divisions sooner than we expected.
Ben Maguire (North Cornwall) (LD)
It is an honour to serve under your chairmanship, Ms Furniss. I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing this important debate and giving an excellent and comprehensive speech.
Many people will be familiar with this topic. In fact, half of all homeowners have had a bad experience with builders at some point. Of course, those cases vary in value and scale, but fundamentally they represent consumers—many of whom are sadly vulnerable or elderly—being taken advantage of by rogue builders and traders.
Those people are all victims, whether they are in desperate need of emergency repairs or have committed to an extension they have saved up for over many years. They can be in a range of difficult situations: financial hardship, poor health or bereavement—some of those harrowing personal stories were outlined by the right hon. Member for New Forest East (Sir Julian Lewis)—and for them, seeking a fair resolution can seem impossible.
Two months ago, I pressed the Solicitor General on the deeply troubling case of Launceston primary school in my constituency, a brand-new building that had to be demolished just as it was ready to be opened because it failed to meet basic safety and building standards. When the developer went bust, it was us—the taxpayers—who were left carrying the cost of rebuilding the entire school to the tune of around £7 million.
Our communities deserve better safeguards and real accountability. Nationally, those stories are all too familiar, and those problems persist even in our sewage and road infrastructure systems, with many developers going bust before such vital infrastructure is finished. The hon. Member for Mid Cheshire (Andrew Cooper) made a powerful case for mandating infrastructure before the sale of homes.
Many of my constituents near Bude reached out to me to explain how a developer abandoned a site after going into liquidation, leaving unfinished roads and sewage works. The developer directly contravened planning conditions by not paying the bond, and yet the local authority had no power to act or hold it to account.
The Government cannot stand by any longer while those rogue developers fail to fulfil their promises. Those cases are shocking to hear, and the wider implications are clear. In the past five years, it is estimated that rogue builders have cost the public around £14 billion. That demonstrates the necessity of an efficient and effective justice system to resolve such disputes, protecting consumers and discouraging cowboy behaviour from builders.
Concerningly, as we have heard today, too many individuals in those situations find the justice system slow, complex and expensive to navigate. These are people in unexpected situations, without the time or resources to rectify them effectively. The Liberal Democrats believe that justice should be on the side of all consumers, not just those who can afford costly legal battles, as was highlighted by my hon. Friend the Member for Harrogate and Knaresborough (Tom Gordon).
The Government should ensure that there are accessible redress routes, such as small claims courts and ombudsman schemes, that work quickly and fairly for everyone. They should also support alternative dispute resolution mechanisms that save consumers time, stress and money, giving them a fair outcome without the burden and cost of going to court. That is important for the victims, and for the hundreds of thousands of honest builders who provide brilliant services for consumers up and down the country. My hon. Friend the Member for Twickenham (Munira Wilson) made the point that the reputation of those businesses is damaged by widespread concerns about the trustworthiness of the industry as a whole. They, too, will benefit if we can effectively deter and catch rogue builders.
Since 2019, there have been more than 125,000 official complaints about rogue builders in England alone. The justice system must ensure that those responsible are properly held to account. It is crucial that proactive steps are taken against these traders through the Competition and Markets Authority and local trading standards bodies, to ensure that they are effectively punished and, where necessary, publicly named and shamed.
To that end, what are the Government doing to ensure that investigations by those bodies are properly resourced and supported? Crucially, to the point made by the hon. Member for Altrincham and Sale West (Mr Rand), how can the Government stop some of these repeat offenders going into liquidation time and again, and then committing the same frauds somewhere else?
How will the Government ensure that victims of rogue builders are provided with accurate and clear information regarding their options? What are the Government doing to support accessible redress routes, as well as out-of-court resolutions for these victims? Finally, will the Minister look into providing greater powers and resources to local authorities so that they can properly hold rogue developers to account and enforce planning permission?
Gareth Davies (Grantham and Bourne) (Con)
It is a great pleasure to see you in the Chair, Ms Furniss, and to see the Minister. This is our second interaction in a week, and, under the direction of the Chair, it will be a lot shorter than the last.
I congratulate my very good and hon. Friend the Member for Wyre Forest (Mark Garnier), on securing this debate. I commend his commitment to this issue over many years. Many of us turn up to these debates as one-offs, but he is a consistent champion for builders and against rogue builders.
My hon. Friend again raises a very fair and well-intentioned question: how can we in this place best protect our constituents from the scourge of rogue builders? He is right that the issue is caused by a minority of people and organisations in the construction industry, who exploit people’s good nature and certainly do not deliver for their customers. We all know someone who has faced this issue, whether that is homeowners or subcontractors, particularly those in the repair, maintenance and improvement sector, as my hon. Friend pointed out.
We have seen the best of Westminster Hall today. I have been struck by the many excellent examples given by hon. Members from many different parties and from across the country of people who have suffered the consequences of cowboy builders. I genuinely thank hon. Members for their contributions to this debate.
This issue is not simply aesthetic or material; it can and often does have very serious consequences. That is why I am pleased that, in recent years, there has been some progress to address some of the problems set out by my hon. Friend the Member for Wyre Forest. For example, there are various competent person schemes that allow builders to self-certify, ensuring that they follow certain rules to comply with building regulations. These schemes ensure that customers are provided with the appropriate financial protection for a minimum of six years to correct work in dwellings that are non-compliant with building regulations.
For our part, the previous Conservative Government passed the Building Safety Act 2022, which introduced competence requirements on anyone doing design or building work. The legislation also brought about the creation of the Building Safety Regulator and the Industry Competence Committee, both of which help to encourage and monitor industry competence. I am nevertheless really looking forward to hearing from the Minister about what specific plans she and her Government have to build on that work to further address the concerns raised by my hon. Friend the Member for Wyre Forest and many other Members from both sides of the House.
Another part of what we can do to push out rogue builders must surely be to encourage those builders who follow the law, play by the rules and deliver for customers. I would not be doing my job if I did not reflect the concerns of the builders I spoke to in preparation for the debate by pointing out that, unfortunately, builders feel that that is not happening under this Labour Government. Instead of backing builders who are not rogue and who work hard, the Government are determined to make sure that doing the right thing just does not pay.
I have spoken many times about the impact of the national insurance hike on the construction industry, but I want to use the last moments of my speech to ask the Minister directly, on behalf of the National Federation of Builders, about the builders tax that the Chancellor is proposing in the upcoming Budget. That will add another £28,000 to the cost of building a new home and drive up the cost of critical national infrastructure, including roads, schools, factories and even nuclear power stations. It will add significant costs to construction and the building sector, and I was asked to ask the Minister what is going on with this Government if they are proposing this tax by way of a formal consultation. On behalf of the official Opposition, I want to be clear that this tax cannot go ahead. Builders and construction workers want to hear her response to that specific point. There are so many hard-working builders in this country, and so many people who make something, and we must get behind them.
Gill Furniss (in the Chair)
I call the Minister to respond to the debate—very briefly.
The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)
I will do my best, Ms Furniss. I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing this debate on an issue that I know he has campaigned on for a long time, beginning when his party were in government.
I really welcome the debate. I am grateful to the many Members who contributed to it for raising their constituents’ concerns and the horrifying cases that they have been dealing with in their constituencies. They set out the serious impacts that incompetent and rogue tradesmen have had on the homes and the physical and mental health of their constituents, who are sometimes elderly or vulnerable in other ways. I know from my own constituents the misery that can be caused and the toll it can take on people, as well as the time and money it takes to remedy problems. I thank Members again for their hard work, through casework and surgeries, to defend their constituents’ consumer rights.
Consumers have a have a right to expect that work undertaken in their homes will be performed competently and that there will be redress if the work does not meet acceptable standards of quality and safety, and I want to take the opportunity to assure the House that the Government are committed to strengthening the system to ensure that that happens. I will try to align my winding-up speech with the winding-up speech in the main Chamber and move quickly to responses to points that Members raised.
The Government’s aim is to improve the market and to support honest and competent tradespeople and firms, working with the industry and with local authority trading standards. The Consumer Rights Act 2015 sets out the standards that consumers can expect in relation to the supply of goods and services, including building work, and the remedies available to them. Under the Act, traders are required to carry out a service with reasonable care and skill, and within a reasonable time. If those requirements are not met, the consumer can ask for the service to be performed again or for a price reduction. If that is not agreed, consumers can seek redress through the courts. The small claims procedure provides the means to pursue a claim of up to £10,000 at an affordable cost and without a solicitor, and consumers have six years to bring a claim against a trader.
Government bodies are also working with the super-sector working groups under the industry competence steering group, collaborating to improve trade and installer competence and to reduce the incidence of poor work. That process brings together over 1,000 individuals across trade bodies, professional organisations and employers to produce and implement competence frameworks across more than 130 occupations.
The Government are committed to strengthening competent person schemes that cover higher-risk occupations such as electricians and gas engineers. Competent person schemes must ensure that consumers are provided with the appropriate protection for a minimum of six years to remediate work that is non-compliant with the building regulations.
Other protections include the TrustMark scheme, which hon. Members have mentioned. That is the only Government-endorsed quality scheme for domestic construction. It covers trades such as fenestration, roofing, and kitchen and bathroom installation, as well as general building work, and it requires participating firms and tradespeople to demonstrate competence and provide for consumer redress. Government-funded schemes for energy and heat efficiency also require installers to hold relevant certifications and to provide consumers with access to redress.
I know that the hon. Member for Wyre Forest has campaigned for a long time on licensing schemes. Licensing or registration schemes exist in the US, Australia and New Zealand and aim to improve quality, protect consumers from incompetent contractors, and provide consumers with redress for poor-quality work. The hon. Member spoke about that in quite a lot of detail. However, few evaluations have been undertaken of the effectiveness of those schemes. The available evidence suggests that they can deliver some benefits, such as increased quality, but that they can also have detrimental effects, including increasing prices for consumers. There is also no clear evidence that the existence of licensing schemes reduces the incidence of poor-quality work. The schemes are reliant on audits and inspections of work to identify incompetent builders, which is similar to the approach of the TrustMark and competent person schemes in the UK.
There are also questions of how licensing schemes would be funded and administered, the implications for existing schemes in the UK, and the resourcing of the organisations responsible for the schemes. Any proposal to introduce a licensing scheme in the UK would have to be based on an assessment of costs and benefits and would have to address those issues.
Hon. Members also mentioned the issue of phoenixing. We are aware of the problem and work is ongoing. In the 2024 autumn Budget, we announced a greater focus between His Majesty’s Revenue and Customs, Companies House and the Insolvency Service on tackling rogue directors and phoenixing. Key actions include closing loopholes in company registration and dissolution, targeted enforcement to boost compliance, and stronger referrals.
I thank the hon. Member for Wyre Forest for welcoming our New Homes Quality Board and ombudsman. From a consumer protection perspective, the Government are supportive of alternative routes to recourse outside the courts, such as alternative dispute resolution and the ombudsman. Many similar schemes already exist, and the Digital Markets, Competition and Consumers Act 2024 strengthened ADR provision. That is also relevant to his comments and reflections on compensation, for which I thank him.
I am very conscious of the time, Ms Furniss, so I will move to my concluding remarks and just thank hon. Members for raising lots of other issues that I do not have time to go through. I will be working closely with other relevant Departments on the wider infrastructure issues that Members have raised on house building.
Sir Julian Lewis
What about the fact that these people, in some cases, are criminals and their actions ought to be subject to the criminal law?
Kate Dearden
I thank the right hon. Member for raising that point. Lots of Members have mentioned the complexity of determining whether something is a criminal offence or a civil matter under the Consumer Rights Act, whether we are looking at a trading standards matter or a criminal act, and demonstrating intent. It is a very complex area and I would be happy to meet individual Members if they want to talk it through with me.
I am sure that the shadow Minister, the hon. Member for Grantham and Bourne (Gareth Davies), does not expect me to speculate or comment on the Budget so close to its announcement. I am sure that his party, during its time in government, had lots of opportunities to address this issue. On his remarks on the licensing scheme, I think he can reflect on similar reflections that his Government worked through.
No one should doubt the human impact that rogue and incompetent tradespeople can have. This issue obviously needs to be addressed, and the best way to achieve that is by improving standards of consumer redress. Although there is no clear evidence on how a licensing scheme would do that, we will keep that under review. In the meantime, we will continue to improve standards of competence and consumer redress in the construction sector. I thank hon. Members again for raising cases on behalf of their constituents. I have run through a lot of them in my concluding remarks, but if Members want to talk to me directly about these issues or ask me to raise them with other Departments, I will be more than happy to do so.
Question put and agreed to.
Resolved,
That this House has considered the matter of protecting consumers from rogue builders.