Covid-19: Poverty and Mass Evictions

Lord Shipley Excerpts

Thursday 22nd April 2021 Grand Committee

[Lord Shipley (LD) [V]]

My Lords, I should remind the House that I am a vice-president of the Local Government Association. This is the second time this week that we are debating this matter. On this occasion, it is an opportunity to discuss government policy approaches, or rather the absence of them, because just extending the temporary ban on evictions once again, as was agreed on Monday, is not sufficient, and I thank the noble Lord, Lord Bird, for enabling us to keep pointing out the need for workable solutions from the Government.

The noble Baroness, Lady Andrews, has drawn attention to the report of the House of Commons Housing, Communities and Local Government Select Committee, and I want to quote a little more from it. On 31 March, the Select Committee said that:

“The Government will eventually have to come up with a policy response, because it cannot keep extending the evictions ban forever more.”


It went on to say:

“We call on the Government to deliver a specific financial package —we prefer discretionary housing payments—to support tenants to repay rent arrears caused by covid-19, in consultation with the Local Government Association and appropriate bodies representing renters and landlords. We received an estimate that this package will likely cost between £200 and £300 million. Given the number of potential evictions this would prevent, it would likely save the Exchequer a substantial amount in homelessness assistance.”


What is the Government’s response?

The Resolution Foundation has estimated that the rates of rent arrears across all tenures were

“at least twice the level of arrears observed going into the crisis.”

It further estimated in January that more than 750,000 families were behind with their rent.

The Secretary of State committed a year ago that no one would be forced out of their home because they had lost income as a result of coronavirus. He also said that no landlord would face unmanageable debts. Landlords’ organisations and renters’ organisations have come up with a plan for a government-led rent relief scheme. The Select Committee has come up with a plan too. Many thousands of tenants and landlords are now extremely worried, so when will the Government decide what action to take?

Housing Strategy

Lord Shipley Excerpts

Wednesday 24th March 2021 Grand Committee

[Lord Shipley (LD) [V]]

My Lords, I thank the most reverend Primate the Archbishop of Canterbury for enabling us to have this debate today. I remind the Committee that I am a vice-president of the Local Government Association.

I am particularly pleased to follow the noble Lord, Lord Blunkett, who said very many things with which I agree, not least on the importance of social value. He referred to the “clarion call” of the Church of England; that indeed is what this report is.

The report, Coming Home, from the Archbishops’ Commission on Housing, Church and Community, is a major contribution to current thinking on housing and on the need for a 20-year strategy. I want to talk first about values. Strategies and policies are built on values, and social values were very close to the thinking of my noble friend Lord Greaves, who spoke in the House only last week on housing and the private rented sector. The news of his death yesterday is deeply sad. He would have welcomed the commission report so very strongly.

There are several core values in the report. Homes and communities should be sustainable, safe, stable, sociable and satisfying. All of these are important words with which I concur. I will say something about safety first. The most reverend Primate the Archbishop of York has talked recently about resetting our compass. I agree. We should not accept homelessness, with all the risks to personal safety that it leads to. I wonder if the Minister might commit to speeding up the scrapping of the Vagrancy Act 1824, which makes it a crime to sleep rough. It belongs to another era, yet it is still being used to prosecute people who suffer from a variety of personal problems.

Then there is the safety of homes and the need to ensure the highest standards; for example, of electrical safety. The Grenfell inquiry has served as a wake-up call to address the shocking standards of building regulation in which hazardous products were allowed on to the market. There has been a culture of poor-quality building, in which cost-saving has been allowed to become the dominant consideration.

Some builders urgently need to improve quality and restore public trust. For example, a few days ago, the Competition and Markets Authority ordered two companies to remove contract terms that have meant that thousands of leaseholders had been paying excessive ground rents. Further, some owners of new homes have been asked to sign non-disclosure agreements when their builder undertakes repairs on their new-build homes. Why is this permitted?

The commission has made important points about sustainability. In that respect, I want to comment on the Green Homes Grant policy. It was welcome in theory, but it suffered from an excess of media spin and insufficient attention to detail. It proved very difficult to get a grant. Delays, plus a lack of advisers and builders with the right skills, have meant that just 8% of the scheme’s target of 600,000 will have been reached by the end of the month. I understand that 128,000 householders applied for a voucher but only 5,000 have actually had the work carried out because of the lack of capacity in the industry. I wonder whether the Minister can explain a little more about how this situation was allowed to arise.

The commission has also talked about the importance of stability. Stability of residence leads to stability of communities, and stable communities mean more sociable and satisfying places to live.

On affordability, the truth is that affordable homes are so very often unaffordable. The word “affordable” should never be used to suggest genuine affordability, which surely relates to income. Everyone needs a secure job, a good education and a decent home—those are values to which we should all subscribe—yet household poverty has risen sharply during the pandemic. Some 220,000 more households live in destitution today—the number has doubled in a year. Furthermore, the pandemic has put 700,000 more people into poverty; the figure would have been twice that had the additional £20 a week in universal credit ceased.

As the commission says, 8 million people in England live in overcrowded, unaffordable or unsuitable homes, with many caught in a poverty trap made worse by the pandemic. Although the Chancellor’s recent decision to deliver 95% mortgages is welcome for those able to take advantage of it, the benefit freeze will hit low-income families. As Shelter has pointed out, some tenants can get £100 less a month than their rent. I have concluded that the social security system is failing to provide adequate housing support for many low-income families.

I challenge the notion that the current affordable homes programme is adequate. There are grants available for socially rented homes, which is welcome, but there is nothing like enough to build the number of social rented homes that we need. Only 7,000 social rented homes were built in 2019. Can the Minister tell the House how many are currently being built?

It seems that the Government’s priority is to subsidise owner-occupation over social housing. First Homes, which sells to first-time buyers at a 30% discount, is to be financed from planning obligations paid by developers. It therefore seems that there will be less money for social and affordable homes from that source, and yet council housing waiting lists are likely to rise significantly as a result of the pandemic.

I am very glad that the Church of England is to use its land assets to promote truly affordable homes. The Government should follow suit by ensuring that part of rising land values is always captured for social and community benefit.

I have one final point: overhauling the planning system will not support the Government’s ambitions to build 300,000 homes a year or the social homes we need. Nine in 10 planning applications are approved by councils and more than a million homes given planning permission have not yet been built. We should also note that 1 million homes are awaiting development—that is, homes on land earmarked for development that have yet to be brought forward for planning permission. I venture to suggest that it is the housing delivery system that is broken, not the planning system.

The most reverend Primate the Archbishop of Canterbury said earlier that we need good housing that is affordable for all. Surely that is an objective that we all share.

Building Safety

Lord Shipley Excerpts

Monday 22nd February 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I point out that the priority of this Government is to protect leaseholders from facing the costs of the removal of unsafe cladding, whether they are in social sector buildings or in private buildings. Where registered social landlords feel that they need to impose costs on leaseholders, access to grant funding is available as well as the new financing scheme. That protects the leaseholders in those properties, which is the priority of this Government.

[Lord Shipley (LD) [V]]

My Lords, I remind the House that I am a vice-president of the Local Government Association. Those in a flat 19 metres high will have unsafe cladding replaced at no cost, and that is welcome. Those in a flat 17 metres high will have to pay up to £50 a month for an unknown period. Why do the Government think that is fair?

[Lord Greenhalgh (Con)]

My Lords, I pointed out that height is a marker for risk. Those buildings greater than 18 metres are four times more likely to result in a fire-related fatality or someone needing to go to hospital for treatment. Above 30 metres, that rises to 35 times more likely. So the focus needs to be on removing the material that accelerates the spread of fire in buildings that in and of themselves, through height and being of residential use, are at greater risk of causing fatalities.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Shipley Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

[Lord Shipley (LD) [V]]

My Lords, I first remind the Committee that I am a vice-president of the Local Government Association.

The noble Lord, Lord Thurlow, has made some very salient points, notably that it is vital that urgent action is taken to help high street businesses by reducing their operating costs. I recall the noble Lord, Lord Thurlow, saying at Second Reading—and again today—that it would prove very hard to estimate rentable and hence rateable values for the traditional retail sector even with this deferral, because new lettings will for the time being be rare events.

When I spoke at Second Reading, I pointed out that retailers pay over a quarter of business rates in England and Wales. That is a very large amount of money, but it will now decline significantly as less is generated from high streets. There is, though, an immediate opportunity to even up business rate receipts by switching a greater burden from the high street to online businesses through the revaluation process itself, because we do not have a fair balance at the moment.

At Second Reading, the Minister said the Government would report in the spring on its fundamental review of business rates. He said he was

“sure that the fundamental review will look at alternative taxes to capture the shift in our shopping habits.”—[Official Report, 18/1/21; col. 1069.]

I welcome that and hope it happens, and I draw his attention to the potential for an e-commerce levy on online businesses.

As we have heard, the move online of Arcadia brands and Debenhams in recent days represents what seems to be an irreversible trend—but that cannot be allowed to mean lower rents and rates for online businesses at the cost of the high street. This proposed new clause would require an assessment of the impact of any business rates revaluation on local high streets to be undertaken within six months, looking in particular at the ability of high street retail outlets to compete with the huge retail businesses that operate online.

The timing could fit well—if the Government wanted it to—with the fundamental review of business rates, and I hope that they will take the opportunity provided by the amendment. It would be strongly and warmly welcomed by high street retail businesses because, as the noble Lord, Lord Thurlow, said a moment ago, the matter has become very urgent.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, Amendment 4, moved by the noble Baroness, Lady Pinnock, seeks to insert a new clause into the Bill which, as we have heard, would require an impact assessment of the timing of rates revaluations on local high streets and, importantly, would look at the impact on their ability to compete with businesses that operate online.

We have a serious problem with our high streets. The problem was in many cases a crisis before the pandemic, as we have discussed today on previous amendments. We can all point to the closed and boarded-up shops in areas that we know. The pandemic has created an even more serious problem for high streets and has put many businesses at risk. We need action from the Government to deal with all the issues that are destroying our high streets and our shopping parades.

We will all have seen the news that Boohoo is purchasing Debenhams and that ASOS is purchasing Topshop, but they are purchasing the names and not continuing with their high street presence. Why they are doing that is the question we need to look at. Clearly, they have taken the view that they do not need, or that it is too expensive to operate, a high street presence. This is why urgent action is needed. The issue with online retailers needs to be addressed. It has been discussed in the other place. My honourable friend the Member for Manchester Central, Lucy Powell MP, has said:

“The pandemic has accelerated changes to the way we shop, yet the government continues to disadvantage bricks and mortar businesses against online companies … The support on offer for struggling business has been a series of sticking plasters. Unless the Government puts in place a long-term plan to help high street businesses survive this crisis and recover on the other side, we will see more well-loved high street names vanishing, and many more jobs lost.”


I could not agree more. I also agree with the noble Lord, Lord Thurlow, that we need vibrant, healthy town centres. As he said, the power to help the high street is in the hands of the Government. I hope the Minister will address that point.

West Yorkshire Combined Authority (Election of Mayor and Functions) Order 2021

Lord Shipley Excerpts

Tuesday 26th January 2021 Grand Committee

[Lord Shipley (LD) [V]]

My Lords, this order represents another small step in decentralising England. The additional powers, over skills and training and strategic housing and regeneration, in particular, are important, if limited. But, of course, there is little extra money.

I shall leave it to colleagues who live in Yorkshire to comment further on the detail of the order, but I want to make the point that what is being introduced is in practice a centralised structure. It is not just that the duties of an elected Police and Crime Commissioner are to be taken over by the mayor, it is also that there will be no assembly, as in London. There, the Assembly exists to hold the mayor to account and make sure that the mayor’s policies, actions and strategies are in the public interest.

Scrutiny matters. We need to look carefully at how scrutiny has worked in all mayoral authorities—not just combined authorities—to assess how each is performing and what we can learn from their achievements or failures. When combined authorities were first introduced, their bespoke nature was understandable, because it meant that different approaches to spreading power in England could be tested. That approach has been useful, but now we need to review how well each of the combined authorities has worked and how more power and responsibility might be devolved from Whitehall and Westminster—and not just to those existing combined authorities. That could take place in the context of the promise by the Government of a White Paper on English devolution, which was due last year, as we have heard from other noble Lords and Baronesses this evening.

At the last election, the Conservative manifesto contained a commitment to a constitution, democracy and rights commission. That is welcome, but, in my view, we need a proper constitutional convention that looks towards creating a federal structure for the United Kingdom. This is because the question of whether to hold another referendum on independence for Scotland should be seen in the context of the UK as a whole. That must surely include the constituent parts of England. It could prove key to helping the levelling up agenda, because I think levelling up, if it is to be successful, will require constitutional reform.

The Covid pandemic is teaching us many things. One is that England is too centralised. There will be a public inquiry, but we need more. We need a constitutional convention to spread power and responsibility much more widely.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Shipley Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Monday 18th January 2021 Lords Chamber

[Lord Shipley (LD) [V]]

I remind the House that I am a vice-president of the Local Government Association.

First, I want to agree with the concerns expressed by the noble Baroness, Lady Andrews, on the Non-Domestic Rating (Public Lavatories) Bill. I welcome the decision to combine the two Bills for Second Reading, given that there has already been a Second Reading of the Non-Domestic Rating (Public Lavatories) Bill. However, it is also appropriate to consider the two Bills separately as they progress through the House, because they cover different issues.

I shall not say much about the Non-Domestic Rating (Public Lavatories) Bill, as other colleagues on my Benches will cover those issues fully. From my perspective, I welcome the Bill and it is right that the Government have agreed to backdate its implementation to April 2020.

I want to speak on business rates and the need for urgent reform of the system. In his introduction, I think I heard the Minister say on the review of business rates that the Government will be reporting in the spring. I had assumed that the Budget at the beginning of March might be the appropriate time for that to be announced, but it sounds now as though it might actually be early summer. I would be grateful if, when he responds to the Second Reading, the Minister might clarify that.

I accept that a delay in revaluation to 2023 is inevitable, given the coronavirus pandemic. However, revaluation must ensure that local government does not end up being underresourced and that councils are enabled to widen their sources of income. Revaluation, when it comes, will be effective only if there is a root and branch reform of the system, so that it is much fairer to high streets and city and town centres, and raises much more from online retail companies and their warehouses. Valuations in much of retail, hospitality and leisure have become very out of date. We should bear in mind that retailers currently pay over one-quarter of business rates across England and Wales.

I hope the Government will avoid the temptation for further temporary fixes to the system. The system was in great difficulty before the Covid-19 pandemic, but it is now broken. One reason for this is that the current system treats companies in the same way, whether they are making a profit or a loss. This is the consequence of levying taxes on the value of a property as opposed to the value of a business itself. This problem can be made more acute by the need of national and local government to raise broadly the same amount each year from business rates, even if turnover and profits of businesses plummet. Another reason is that the current system does not address the lower business rates paid by companies retailing online and based in out-of-town warehouses. Revaluation must take this into account. I have concluded that we should consider the retail sector as a whole and divide up the tax burden differently, so that online retailers pay their fair share of the total tax bill.

There is a lot pressure to move to an annual system of revaluation. I can understand the arguments for that, but, instinctively, I think that three years would be better. It would reduce administration and allow trends to be more certain.

Finally, there is a very strong case for extending the business rates holiday from April this year. In the current year, the Treasury has written off some £10 billion in business rates, fully exempting around 358,000 properties in retail, leisure and hospitality. The case for continuing the current scheme is strong, probably for another full year, although some selective phasing might be appropriate. That said, the Government should be careful not to give a business rates holiday to companies which do not need it. As an example, large supermarkets—whose profit levels have been rising during the pandemic, as evidenced by their recent results—did not need the help they were given in the current year and so were right to pay it back. The Government should not be borrowing money on behalf of the taxpayer to give it to retailers whose profits are rising. That said, smaller high street retailers, including convenience stores, will certainly justify extra help, well into next year.

Provisional Local Government Finance Settlement

Lord Shipley Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

I thank my noble friend for raising the issue of the high street. There is support through the high streets fund to ensure that our high streets thrive, but they are places where we need to see significant change. As my noble friend points out, a lot of businesses on the high street are struggling to pay their business rates. I think that, in the longer term, the tax base needs to shift. This is not policy, but self-evidently we are seeing online business take a greater share, and those housed in bricks and mortar are struggling to make a go of their businesses.

We need to see a policy shift over time. The Government cannot do that by waving a magic wand, so we need to make sure that there are policy tweaks to support the high street in the interim. There are a lot of measures to do that in those that my right honourable friend Robert Jenrick has announced. More will be coming to support our high streets, which are the very bedrock of local economies.

[Lord Shipley (LD) [V]]

My Lords, I too should remind the House that I am a vice-president of the Local Government Association. The Minister said earlier that the settlement is particularly generous, but the reality is that the Statement means that council tax could rise for council tax payers by up to 5% in April. At the general election just over a year ago, the Conservative Party manifesto promised not to increase income tax, national insurance or VAT in this Parliament. The consequence is an increased burden on council tax payers for the sixth year in a row, largely to fund adult social care. Why do the Government force up council tax in this way, well above the rate of inflation?

[Lord Greenhalgh (Con)]

My Lords, all of us who have run local authorities recognise the spending pressures intrinsic to local government, particularly for adult social care but also for social care for children. They form a significant part of any local authority budget, so it is quite right and proper to think about giving the option, as a balancing item, to have the latitude to increase council tax to pay for some of our most needy. The other 2% is very much guidance; it is a balancing item. It is for administrations up and down the country to decide whether they want to increase council tax to achieve the maximum core spending power. That is the situation that we find ourselves in. There is no reduction in grant and significant extra funding to see local councils through the Covid-related pressures. That is a good deal, particularly given the state of our national economy and the rise in national debt.

Housing: Leasehold

Lord Shipley Excerpts

Tuesday 5th January 2021 Lords Chamber

[The Lord Speaker (Lord Fowler)]

The noble Baroness, Lady Warwick of Undercliffe. No? I call the noble Lord, Lord Shipley.

[Lord Shipley (LD) [V]]

My Lords, five years ago the Leasehold Knowledge Partnership warned the Government of the pending ground rent and leasehold scandals. At the time, the Government promised legislation by the summer of 2018. It is now 2021. Why has it taken them so long to bring forward legislation?

Fire Safety Bill

Lord Shipley Excerpts

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 17th November 2020 Lords Chamber

[Lord Mann (Non-Afl)]

My Lords, I declare an interest, having lived for nearly 20 years as a private tenant in—under the definition in this amendment—a high-rise block in London. I am trying to work through how a register would apply, because I have never solely rented. It has always been part of a multiple-occupancy residency within a council-owned block where a private owner has bought a property and then leased it out to the likes of me.

The amendment seems to be approaching this the wrong way around. The poorer one is, the more one will be buying second-hand goods and not buying direct from manufacturers, particularly with white goods. Systems of registration can never easily apply with that. The Government should be looking at the opportunity—although it cannot be fitted into this Bill at this moment—whereby there is an incentive at local authority level for there to be certificates of competence in relation to properties that are being let out, in relation to electrics and gas, so that one can see that the standard has been met. Such a system would quickly isolate those who were not prepared to have the relevant certificates in place, who would then become the primary targets for enforcement investigation. It seems that the market could assist in a significant part of the solution if it was required to parade its worthiness in an effective public way in terms of the safety of a property.

Under this definition, this building would be a high-rise building. In planning terms this is one building, with at least two occupied residences; there may be more that I am unaware of. That is not necessarily an argument against this amendment, and might even be one in favour of it, to fast-forward some of the building changes that are needed in here. However, rightly, the focus has been the Government’s focus. I make no criticism whatever of this or of contributors in this debate, in terms of traditional high-rise. However, while I am in favour of the Government’s approach in wanting more office-style or above-shop conversions over the last 20 years, often these buildings were not designed as accommodation, and, having seen first-hand some of those which have been done over the last 20 years, if they are badly designed, the fire risk seem disproportionately high. That aspect of “above-shop”, which could be two, three, four or storeys in some cases, in terms of accommodation, needs more attention from the Government, and potentially, more powers for local authorities.

Finally, in the context of Clause 1—I hope that the building safety Bill is the appropriate place for this—the fire risk in fixed Traveller sites and park home sites is a different kind of problem. The problem could be immediately outside the property. Park home sites in particular may be constrained by a perimeter wall, and the fire risk comes from the lack of space therein. I have direct experience of challenging that, and it has been fiendishly difficult to do anything about it in law. I hope, as the Government move the building safety Bill forward, that the question of properties on fixed Traveller sites and park home sites will be looked at, including in the context of fire safety. More can and should be done there.

[Lord Shipley (LD) [V]]

My Lords, I remind the House that I am a vice-president of the Local Government Association. I strongly support this group of amendments, and it is good to see cross-party support for them.

At previous stages of the Bill, I spoke on the importance of increased electrical safety checks. In view of what we are now hearing from the Grenfell inquiry, such checks of electrical systems and appliances in high-rise blocks are vital. As the noble Lord, Lord Bourne, said, there should be a safer home environment and we should be translating good intention to action. I strongly agree. He reminded us that almost half of domestic fires relate to an electrical fault, and also of the precedent of a register of electrical equipment in student housing blocks.

The noble Lord, Lord Randall, made a number of points on second-hand electrical equipment, which I hope the Minister will note. The noble Lord, Lord Whitty, explained that the cost is minimal. This derives, in part, from the speech of the noble Lord, Lord Best, in Committee, where he identified how the cost could be much lower than people had thought. My noble friend Lord Tope called for a clear commitment from the Minister on what action the Government are proposing and when they are proposing to implement it.

It has been said that the legislation will be complicated to enforce. The noble Earl, Lord Lytton, made a number of detailed points about the responsibilities of leaseholders and those with other kinds of tenure. I hope the Minister responds to those points, particularly in view of the distinction that may have to be drawn between systems and appliances. The points made by the noble Earl, Lord Lytton, will be very helpful in drafting regulations. He said that we need a cultural change; that has to be right.

The noble Lord, Lord Mann, has personal knowledge of living in a residential block as a private tenant. That experience will clearly be helpful to the proceedings of the House. He raised a number of important issues on design, which I hope the Minister will note.

It is important to understand the issue properly. It is surely the right of tenants and leaseholders of high-rise blocks to feel more secure. This is a public safety issue. I cannot understand why checks are required in the private rented sector but not for high-rise blocks, except where the property in that block is privately rented. I hope that we hear something helpful on this from the Minister in a moment.

Finally, there is going to be a responsible person. I am fully in support of that, but such a person needs responsibilities to undertake. This group of amendments presents some responsibilities that seem central and core to the duties and obligations of a responsible person. For that reason, I fully support this group of amendments.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, as this is the first time I am speaking on Report today, I refer the House to my relevant registered interests—namely, as a vice-president of the Local Government Association, chair of the Heart of Medway housing association and a non-executive director of MHS Homes Ltd. I support the Fire Safety Bill. My main concern across the whole Bill is the speed with which we are moving forward. That is the main issue for me with this and other amendments.

I fully support the amendments before us today in the names of the noble Lord, Lord Bourne of Aberystwyth, and other noble Lords. I tried to sign up to these amendments, but I was too late; all the spaces had already gone when I contacted the Public Bill Office. I have made it clear to the noble Lord, Lord Bourne, that he has my full support, and I pay tribute to him for raising these issues, as he did on 29 October during the consideration of the Bill in Committee. I also put on record my admiration for the charity Electrical Safety First, and Robert Jervis-Gibbons and his colleagues, for all the work they do to highlight the danger of electrical fires to both property and people. Through their campaigning work, we have managed to make progress in recent years in the area of fires started by electrical ignition.

In speaking in this debate, noble Lords mentioned the fires at Lakanal House in Southwark, Shepherds Court in Shepherd’s Bush and Grenfell Tower—all examples of the tragedies that electrical fires can cause. We need to ensure that action is taken. As has been clearly set out to the House, these amendments are intended to build on the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020, which provide for mandatory checks in the private sector every five years. Those regulations were good news, and the noble Lord, Lord Bourne of Aberystwyth, deserves credit for all his work in bringing them into force.

What now needs to be addressed is the tenure lottery that has been created, as private tenants in a building will be covered by the regulations but social tenants and owner-occupiers will not. There are three types of tenure, but only one would be required to have electrical safety checks. You can see the problem: if you have a block of flats but only some of the properties are tested, covered and confirmed as safe, or have remedial work that is needed and undertaken, but others are not checked, the building is then not safe. How can some properties be required by law to be checked, when others are not? That has to change. I suggest that, to be certain the building is safe for all dwellings, it would need to be checked by a competent person. If it is for only some of the dwelling, you cannot deem the building to be safe.

The amendments before us also provide for a responsible person, which is a new role that I fully support, to be brought into being to compile a register of every white good in a building. This would ensure that, when a recall of a product occurs, we can quickly identify all the affected appliances and the safety issue can quickly be resolved. This does not take away responsibility from the people who sell the appliance or the manufacturers, but it is another important safety measure.

The Government may take the view that they cannot commit to this, at this stage. The noble Lord, Lord Bourne, has not indicated that he wishes to test the opinion of the House, but I hope to have a considered opinion from the noble Lord, Lord Greenhalgh, on these important amendments. I also hope that the noble Lord and his team will look at what goes on in other parts of the world—certainly in Australia—where there are much stricter regimes about electrical white goods than elsewhere. They need to be looked at because, clearly, if this can work in other parts of the world, it can work here. All these amendments are about keeping people safe, and I fully support them.

--- Later in debate ---

[Lord Shipley (LD) [V]]

My Lords, the noble Baroness, Lady Neville-Rolfe, has made a number of helpful and very important points. Amendment 6 seeks clarification from the Minister on a number of problems in relation to leaseholders and the impact on the housing market of the current problems with selling properties. I, too, look forward to the Minister’s response, as it would be helpful to us all to have an up-to-date understanding of his thinking.

We shall, of course, address this matter on Amendment 13 as well, as it is central to the future management of high-rise accommodation, or the less high-rise accommodation that nevertheless still suffers from some of the problems of the high-rise blocks. As the noble Baroness said, we need a way forward for the housing market in solving the problems of some leaseholders. I entirely agree with that, and I hope that forthcoming meetings will be able to address those issues.

Amendment 5, moved by the noble Lord, Lord Kennedy of Southwark, is entirely sensible. Of course it is right to consult properly and fully in developing legislation, so I assume that the Minister will be able to confirm this afternoon his entire agreement to this amendment because it is so eminently sensible.

[The Earl of Lytton (CB) [V]]

My Lords, although I certainly agree with the thrust of Amendment 5, it is Amendment 6, in the name of the noble Baroness, Lady Neville-Rolfe, that I really wish to address.

Many of my years in the property profession have been spent in survey inspections, with a spell in estate agency and mortgage valuations and brief periods in block management, and I have spent a good deal of time on the forensic identification of defects. Therefore, I feel reasonably well qualified to support the noble Baroness, and I thank her for raising this important issue, which affects the residential sector. Rightly, she referred to the indirect effect of the Grenfell tragedy. That is a matter on which I have been in constant contact with the Chartered Association of Building Engineers, of which I am a patron and which has been very helpful in identifying various matters in respect of the Bill.

As the noble Baroness said, the effect on the residential market for flats in particular, and over a very broad spectrum by age and type, is now apparent. This has affected security for mortgage lending, exacerbated by the prospect of large and, as the noble Baroness said, unquantified remediation bills. Some sort of game of pass the parcel seems to be in train as to who will end up picking up those bills. It affects buildings insurance cover and premiums, and interim measures such as “waking watch” are racking up huge costs. These and the likely shortfall, as I see it, in the provision for remediation made by the Government—welcome though that is, but nevertheless there is a shortfall as against the widening scope of the buildings that might ultimately be affected—have seriously affected the ability to sell flats. It is not clear that this is in any way confined to high rise, as I am increasingly aware, as one of my children attempts to sell a flat in a four-storey modern and, I believe, conventionally constructed block.

A few days ago, a lady emailed me to say that she is a resident of a sister block to the one in Worcester Park which burned down last year. She is completely stuck with a currently worthless asset and no apparent movement on remediation. The latest Sunday Times carried an article about this, graphically illustrating the issues and defects that have been found to be present in a number of remaining identical buildings that are still standing.

Before this gets yet more problematic and starts affecting potentially a far wider range of properties than at present, the Government need to use their powers and influence to get all the interested parties round a table—constructers, lenders, insurers—and point out, as the noble Baroness said, the reputational as well as economic and social damage that needs to be contained beyond the issue of direct liability and who shoulders that, and require their active co-operation to resolve this in a constructive manner and not leave vulnerable homeowners, to put it bluntly, hung out to dry.

I appreciate the criticism of the EWS1 form, but it came about because of a particular need to do with mortgage lending. It is now being required for a much wider range of purposes, for which it was never intended. Why? Because it was the only tool available. The Government could step into this obvious void and make sure that some other form of certification solution was provided. But they, or somebody else, would have to take responsibility for that, and I realise that that is an issue. Meanwhile, the potential liabilities make it ever less likely that those without specific accreditation to do the necessary inspections will be willing to undertake such work and, indeed, they may not be able to get professional indemnity insurance either.

The Government need to get ahead of the curve here. If these measures are rushed into effect with full force immediately and without additional steps, there will be more serious disruption and collateral damage to come. I suggest there be a phased and managed approach aimed at containing the ill effects, restoring trust and confidence, above all, in the measures being put in place and limiting financial loss while dealing, most importantly, with the most pressing issues where residents’ safety is at the greatest peril. None of this is without risk; nor is the normal “Not my responsibility, guvnor” liability-passing response appropriate in these abnormal times, given the number of national issues we face and the effect on the wider economy.

This means temporary but probably arbitrary cut-offs, probably in height terms—11 metres may be the right figure for blocks of flats—perhaps with certain other definitions, then dealing with those and drawing the net more widely later on and inevitably, as one will, picking up legacy issues from older regulatory sign-offs on the way. Some sort of lower-tier interim certification, which the noble Baroness referred to, perhaps by a non-specialist, would enable low-risk properties to escape the contagion that might otherwise engulf the sector. I wonder if this is what the Minister will propose in Amendment 7. I will listen with great interest to his response.

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[The Deputy Speaker (Baroness Morris of Bolton) (Con)]

My Lords, the noble Baroness, Lady Eaton, has withdrawn, so I now call the noble Lord, Lord Shipley.

[Lord Shipley (LD) [V]]

My Lords, I agree entirely with my noble friend Lord Stunell. There have been—and still are—legislative opportunities for the Government to act. When the Minister sums up, I hope that he will urgently clarify the Government’s plans.

As the noble Lord, Lord Kennedy of Southwark, said in introducing this group, progress has been disappointingly slow. He went on to say that it is “beyond belief” that, three years after the Grenfell fire, action is so slow. He is absolutely right. The general public will become increasingly worried by the deeply disturbing revelations of the Grenfell inquiry.

This amendment seeks to implement recommendations made in the Grenfell Tower Inquiry phase 1 report. Surely that is the right thing to do as a matter of urgency. This new clause would clarify the duties of an owner or manager in relation to a building with two or more sets of accommodation to provide information on its construction to a local fire and rescue service. Secondly, it would introduce annual inspections of individual flat doors. This is an essential change, given recent experience and the growth of our knowledge about the state of so many entrance doors. This clause would also require monthly inspections, and for evacuation and fire safety instructions to be shared with the building’s residents. What on earth can be wrong with these proposals?

There is nothing in this amendment which should be surprising or problematic. Frankly, the general public would expect nothing else. If the noble Lord, Lord Kennedy, decides to press this matter to a vote, I shall certainly support him.

[Baroness Pinnock (LD) [V]]

My Lords, this amendment, tabled by the noble Lord, Lord Kennedy, is fundamental to the effective implementation of the principles of this Bill. The role of the responsible person is one of the recommendations of the Grenfell inquiry phase 1 report which was published more than a year ago. I quote from the recommendations in the report:

“No plans of the internal layout of the building were available to”


the London Fire Brigade

“until the later stages of the fire … It should be a simple matter for the owners or managers of high-rise buildings to provide their local fire and rescue services with current versions of such plans. I therefore recommend that the owner and manager of every high-rise residential building”—[Inaudible.]

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[Baroness Pinnock (LD) [V]]

My Lords, many tenants and leaseholders in blocks with cladding that is now known to be a serious fire hazard find themselves in a very bleak place indeed. This amendment seeks to address that. Leaseholders have purchased flats in good faith with building surveys, mortgage insurance and building warranties in place. They have done the right thing. Now, through no fault of their own, they are being threatened with additional service charges of several hundred pounds each month to pay for the so-called waking watch, a 24/7 in-person lookout for potential fires. On top of that, they are being asked to fund the considerable costs of remediation work to remove the dangerous cladding and replace it with a safer system. Figures I have seen for some of this work run to tens of thousands of pounds. How are leaseholders, who already have a hefty mortgage, supposed to afford, say, an additional £40,000 bill for the remediation work?

During the debate on an earlier amendment, the Minister referred to leaseholders being asked to pay only affordable costs. I am very disappointed if that reflects the Government’s thinking. Leaseholders should not be asked to pay towards remediation of problems that are not of their making in any way. The question that then arises is: who was responsible for including these dangerous cladding panels in the first place? The construction companies surely have some responsibility. The warranties that were provided on the building should surely cover errors made during construction. The people who do not have any responsibility are those currently being asked to pay the bills. This is not just and not right, and we have an opportunity today to take the first step towards removing the anguish and anxiety faced by homeowners and tenants in this position.

I thank the Minister for making time available for a very useful discussion of this issue, and I accept that the scale of the problem is very large and that the cost of remediation works will run to tens of billions of pounds. I also accept that the Government have made some attempt to relieve the financial pressure on homeowners by providing a £1.6 billion fund towards the costs. However, I suspect that that is just a small portion of the total cost. Perhaps the Minister can indicate the scale of the problem.

I bring us back to the basic question: who should take responsibility? Just yesterday, during the Grenfell inquiry, evidence was given by one of the suppliers of the cladding system about the misinformation provided to win the contract. Evidence has been provided that the Building Research Establishment had already shown the high flammability of these cladding systems. The Grenfell inquiry phase 1 report stated that

“there was compelling evidence that the external walls … failed to comply with Requirement B4(1) of Schedule 1 to the Building Regulations 2010, in that they did not adequately resist the spread of the fire having regard to height, use and position of the building. On the contrary, they actively promoted it.”

Clear evidence, then, of culpability during construction or refurbishment at Grenfell. Of course, we do not know if this is the case elsewhere, but we have sufficient information to demonstrate that those who pay for this extensive remediation must not be the tenants and leaseholders.

We on these Benches feel very strongly that there is a just and moral case for leaseholders and tenants not to be required to contribute to any of the costs. I will listen carefully to what the Minister has to say but if the Government do not accept the amendment, I will feel it necessary to test the opinion of the House.

[Lord Shipley (LD) [V]]

My Lords, I listened to the Secretary of State on the “Today” programme this morning, in which I heard him say that the cost of removal and remediation of dangerous cladding from residential buildings should be as affordable as possible for lease- holders. This afternoon is an opportunity for the Minister to make clear what this means. I understand that builders and freeholders may have responsibilities in meetings such costs, but where a leaseholder is not a freeholder, why should they have a responsibility to pay out?

The uncertainty for so many leaseholders who are stuck trying to sell their properties or are worried about their possible financial exposure needs swift resolution. The amendment would protect leaseholders who are not freeholders, and tenants, from extra costs, be they single or staggered lump sums, increases in service charges or increases in rents. The responsibility for making safe a building with a fire risk should not lie with the leaseholders or tenants. The amendment would make it clear that it is unreasonable to expect them to be responsible for those costs when they are the ones exposed to risk through no fault of their own. I hope the Minister will agree that this amendment, which would protect leaseholders and tenants, is justified.

[The Earl of Lytton (CB) [V]]

My Lords, this is an enormously complex issue, as I outlined in an earlier amendment. The current legal framework makes liability for the matters that have been referred to by the noble Baroness and the noble Lord a patchwork, and entirely uncertain of outcomes. So significant are the matters at stake that in a normal course of events it may be years before matters are resolved by the courts. We need a quicker fix than that, which is why earlier I suggested that the Government should take a firmer hand in this and not leave it to the industry and markets to sort out. In other words, there is a strong case for government intervention. I welcome this amendment, although not precisely on its own terms, because I think it has some potential flaws. However, certainly the opportunity to debate the issue is absolutely vital.

Non-Domestic Rating (Rates Retention, Levy and Safety Net and Levy Account: Basis of Distribution) (Amendment) Regulations 2020

Lord Shipley Excerpts

Tuesday 3rd November 2020 Lords Chamber

[Lord Shipley (LD) [V]]

My Lords, I remind the House that I am a vice-president of the Local Government Association. I say at the outset, on behalf of these Benches, that I am happy to support this statutory instrument. The Minister made a very clear case for these regulations. I also congratulate the noble Lord, Lord Botham, on his maiden speech. We very much look forward to hearing his future contributions in this Chamber, particularly on matters related to sport and the work of the voluntary and charitable sectors.

The very title of this statutory instrument suggests complexity. I understand why it is needed, given changes to the structure of local government in several council areas across the south of England. But that complexity is hard for the public to understand, as was explained by the noble Baroness, Lady Scott of Needham Market. We can see from reading the SI that it is dependent on algebraic formulae and calculations that run to four decimal places. It has been suggested that only a handful of people understand the system of distribution. In one sense, it may not matter too much if the public have confidence in the outcomes, however they are calculated, but it becomes more difficult if the outcomes start to be challenged. Given the pressures on local authority budgets being caused by coronavirus, we may see that happen more frequently. The heart of the issue is the fair distribution of money, which is harder to guarantee in view of the coronavirus pandemic.

The noble Lord, Lord Liddle, talked about land value taxation; I agree with what he said. He also said that business rates are a very big tax, and they are. One problem, of course, is that if less money is raised through business rates, the pressure on council tax potentially rises, yet the pressure on people paying council tax cannot be allowed to worsen. I agree on the need for a new equalisation formula. I am very taken with the idea of fiscal federalism that the noble Lord, Lord Liddle, proposed for England. There is an argument for it; I hope that, when discussions take place on the long-term future of the business rates system, we will look at that more closely. As the noble Baroness, Lady Scott of Needham Market, said, the system is not fit for purpose.

Can the Minister tell us whether this statutory instrument has local support? Have all the local authorities affected by the SI agreed to this, and were there any representations from them? Behind everything is the pending review of business rates, as has been raised by several speakers this afternoon. This is urgently needed given that the consultation closed, as we know, at the very end of October. As we have heard, there is no solution for 2021-22—and lockdown this month puts further pressure on the system in this financial year, never mind the next.

My view is that the Government should extend the system of business rates deferral—or holiday—through much of 2021. I think this is now unavoidable. Will the Minister confirm the Government’s thinking on this? The rising cost of local government will otherwise not be met; they certainly cannot be met by loading the extra cost on to council tax alone. The Minister said in his opening remarks that it is a technically complex system. He is right. He also said that he looked forward to our contributions—I think with respect to providing solutions. It is a very complicated area. My view is that it will be solved only through all-party discussion and agreement. I hope the Minister and the Government will think about that in the context of the publication next spring of proposals on the long-term future of the business rates system. With all of that said, we are very happy to support the proposals in this statutory instrument.