Levelling-up and Regeneration Bill

Lord Thurlow Excerpts

Committee stage
Thursday 18th May 2023 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

Madam Deputy Chairman, we spoke to our amendments in the previous session, so we move on to the debate on the other amendments.

[Lord Thurlow (CB)]

In the absence of my noble and learned friend Lord Etherton, I will begin this debate with specific reference to Amendments 332, 333 and 341.

[The Deputy Chairman of Committees (Baroness Bull) (CB)]

I remind the Committee that we are still debating the group beginning with Amendment 313, if any noble Lord wishes to speak on amendments within that group.

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[Lord Etherton (CB)]

My Lords, I will speak to my Amendments 332, 333 and 341. I am extremely grateful to the noble Lord, Lord Thurlow, for co-signing them. I entirely agree with much that the noble Lord, Lord Best, said. A whole variety of the amendments in this group are aimed at the same principle: how best to increase decent and affordable housing, particularly social rented housing, for those who so badly need it.

Amendments 332 and 333 concern the setting of infrastructure levy rates under new Section 204G of the Planning Act 2008, to be inserted by Schedule 11 to the Bill. Currently under that provision the only requirement in setting the infrastructure levy rates is to have regard to the desirability of ensuring that the level of affordable housing funded and the level of funding provided by developers is not less than before. That is simply not good enough.

As we all know, there is a critical shortage of affordable social housing. The Minister acknowledged this, most recently when answering a Question in the House on 25 April concerning the National Housing Federation’s report, Overcrowding in England, published on 19 April, particularly its finding that one in six children lives in overcrowded conditions. Shelter has reported that over 1 million households are waiting for social homes, and that last year 29,000 social homes were sold or demolished and fewer than 7,000 were built. It also says that there are now 1.4 million fewer households in England in social housing than there were in 1980. These are shocking facts and statistics.

Amendment 332 provides, as noble Lords will see from the Marshalled List:

“A charging authority must prepare and publish a Strategic Housing and Market Assessment specifying what affordable housing is needed within the area of the charging authority … The charging authority must publish a new Strategic Housing and Market Assessment every three years”.


Amendment 333 provides:

“A charging authority must set rates of IL at a level which, in conjunction with the exercise of such other powers as it possesses, is likely to provide not less than the amount of affordable housing specified in its Strategic Housing and Market Assessment over a three year period”.


The Bill would then continue as it currently does, ensuring that there is no lesser level of funding than before. I have specified a period of three years but would be very happy to discuss with the Minister and others whether that would be appropriate.

It would then be necessary to amend new Section 204N, which requires the charging authority to apply the infrastructure levy in funding

“the provision, improvement, replacement, operation or maintenance of infrastructure”,

which is a term defined to include a wide variety of things, from schools and medical facilities to open spaces and the mitigation of climate change. Those are all very worthy causes, but affordable housing is only seventh out of the 10 matters in the definition of “infrastructure”. There is no provision for prioritising one type of infrastructure over another, while the greatest need is plainly for decent and affordable social housing. To have the right and ability to live in a decent home is one of the most basic human rights. Giving priority to the need for affordable housing—more particularly, affordable social housing—is the purpose of Amendment 341, which would introduce into new Section 204N a cross-reference to new Section 204G as we propose that section should be amended.

[Lord Thurlow (CB)]

My Lords, I add my voice to Amendments 332, 333 and 341 from the noble and learned Lord, Lord Etherton, concerning affordable housing, which lies at the root of the Government’s responsibility to their citizens. As we have just heard, it is the duty of government to provide safety and security to its citizens and a roof over their heads. That responsibility includes, at the very top of the list, the needs of the homeless. It is important to remind ourselves that the definition of homeless here includes many of the most vulnerable in our population. They are citizens too, but current circumstances may cause them to question that.

Successive Governments have repeatedly failed to replace council houses sold into the private sector, and this reducing inventory of low-cost housing, however defined, continues against a background of increasing homelessness and need. The Government must somehow finance more affordable housing. These amendments, taken together, will assist in that objective.

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Finally, Glover gives this amendment a strong following wind, and the Government’s own response to the Landscapes Review does so too. I hope the Government are therefore sympathetic to this amendment.

[Lord Thurlow (CB)]

I thank the noble Lord, Lord Hodgson, for letting me add my name to his Amendment 471 concerning rights of way.

I have never been able to understand why the Government wanted to apply a guillotine to registering long forgotten and rediscovered public rights of way. The noble Baroness, Lady Scott of Needham Market, made a number of interesting points but one in particular stood out for me. No one is attempting the equivalent of a land grab here; there is no rights grab going on. There are no compulsory purchase order-type approaches over land. Rights of way are simply a public asset, and that really is the focus of my short remarks this afternoon.

The Government are keen to open up the countryside to the public. The noble Earl, Lord Clancarty, just used the wonderful phrase “taking nature to your doorstep”. Farmers are finding their subsidy linked to the greater good rather than acreage. Access to the countryside is increasingly and frequently cited as a provider of mental health benefits to urban dwellers, and rights of way are one of the very few means of rural access available nationwide. Rights of way have already been levelled up.

The Government have agreed to delay the cut-off date for registering public rights of way to 2031, a token extension, but there seems to be reticence to action their promise to repeal the deadline once and for all. The Bill offers the perfect opportunity for the Government to make good their promise. I would like to know who is prevailing upon the Government behind the scenes to create this anti-social interference with the existing rights of the public, and what entitles the Government to quash the revelation of former rights of way as they are brought to light. We are not requesting new rights of way, simply confirming those which may have existed for centuries. They may have disappeared from the record, but, if verified, have always been there. Surely it is the Government’s duty to protect these public rights.

The key to rediscovering ancient rights of way lies in long-forgotten archives or seldom-accessed archives belonging to public libraries, local authorities, the Church and similar institutions, and to folklore. In addition, they may be found on the ancient maps on the walls of estate offices on large estates. These important ancient rights will inevitably be revealed slowly as the evidence is discovered. Society should rejoice as the network quietly grows, granting greater public access to green spaces. Inevitably, this process of discovery will quietly continue over many years, indeed decades, and to close an ancient right of way is to remove a precious public asset. It is ironic that the Government should be in place to protect public rights, yet willing to abandon them.

As we have heard, there are already thousands of rights of way claims awaiting processing. Some have been in the works for years, and thousands of miles of unrecorded routes need further research. Why do the Government stand in the way of this public service, rather than welcome it? Lift the cut-off date, I urge the Minister, and make good the Government’s promises by supporting the amendment.

[The Duke of Montrose (Con)]

My Lords, I offer support to my noble friend Lord Randall on protected landscapes. We need to know where we are going on this. We are trampling through the devolved competencies. Luckily, Scotland is adopting green policies with even more enthusiasm than local authorities in England, but we always need to bear in mind that the original legislation was the National Parks and Access to the Countryside Act, and originally, and even today, some see the second part as more important, as we were hearing from the noble Baroness, Lady Bennett, and the noble Earl, Lord Clancarty.

I live in a national park in Scotland, and the Scottish Government are providing millions of pounds every year to staff it and provide facilities for the public. On my land, they have just provided £800,000 to improve a footpath. When we think of the value of national parks for nature, it is worth recalling that for a body called the International Union for Conservation of Nature, our park qualified only for level V, because the only limit they had in law was to preserve the topography. We need to make up our mind what level of nature conservation we desire.

A dedicated percentage of land for conservation and marine conservation areas was announced recently, and the Scottish Government have taken it up and announced a timetable for extension of their marine protected areas. This has brought a sense of desperation, particularly to the crofting counties on the west coast, because they see it as a hammer-blow to the crofting way of life, which requires buying livestock, cutting peat, fishing, weaving and crafts. This is a whole culture which could be lost. There are areas where we want to preserve the way of life, as well as nature. I hope that my noble friend Lord Randall’s efforts will point the way.

Levelling-up and Regeneration Bill

Lord Thurlow Excerpts

Wednesday 3rd May 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I completely understand my noble friend’s issue and, as I have said, we are very happy to have a meeting to look at what can be done in the existing system. We know what is going on with the proposed system, but I understand the issues and we will meet further on this with the emergency services.

Turning to Amendments 331 and 346, I thank the noble Lord, Lord Shipley, for speaking on behalf of the noble Baroness, Lady Pinnock, and my noble friend Lord Greenhalgh for tabling these amendments. I agree that ensuring that development is accompanied by the timely provision of the right infrastructure is important to local communities where development is taking place. However, requiring a full payment of the levy up front would impact the viability of development and result in fewer homes, and therefore fewer affordable homes, being delivered. Large developments can be built out over periods of a decade or more, and it is not necessary for all mitigating infrastructure to be delivered in the early stages of that development.

[Lord Thurlow (CB)]

The viability of development, particularly larger schemes, does not put the developer’s position at risk. The increased costs of—in this case—the infrastructure levy come out of the value of the land: in other words, the landowner, who, at the stroke of a pen in a local authority, has seen their agricultural field, for want of an example, rise from £4,000 or £5,000 an acre to £750,000 an acre. That is where the loss of value will occur—in the simple viability of a large development.

[Baroness Scott of Bybrook (Con)]

I thank the noble Lord for that. As I said, large developments can take a decade or more to build out and we do not want to build infrastructure, only for it to stand idle for a long time. This would increase costs for developers, reducing the amount of money that can therefore be put towards other infrastructure and affordable housing, without generating additional benefits for the communities. I agree that infrastructure must be delivered in a timely way, but that means neither too early nor too late. I will turn in a moment to the powers in the Bill that will allow this.

Levelling-up and Regeneration Bill

Lord Thurlow Excerpts

Committee stage
Wednesday 22nd February 2023 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, good debate. I agree.

[Lord Thurlow (CB)]

My Lords, I was concerned that, after quite a sky-level discussion of missions and strategy and things, Amendment 42 was going to be very specific and granular. We have had some outstandingly worthwhile speeches in the last few minutes, and I congratulate all those who sponsored the Bill and who have spoken so far.

I was going to speak in a granular sense as well about insurance, proposed new subsection 3(e) in the nine small but specific letters of this amendment that we are forcing the Government to address, if it is adopted, in the event that a report says that this should be done in the interests of levelling up. We have had such a good exposition on insurance scams from the noble Baroness, Lady Fox of Buckley, that I am not going to say what I was going to, which would only repeat much of what the noble Baroness said—but I do hope that we can get into the granular level of these injustices for leaseholders as the Bill progresses.

Levelling-up and Regeneration Bill

Lord Thurlow Excerpts

2nd reading
Tuesday 17th January 2023 Lords Chamber

[Lord Thurlow (CB)]

My Lords, I add my voice of welcome to the noble Baroness, Lady Anderson of Stoke-on-Trent, and congratulate her on her excellent maiden speech. We welcome her to this House and look forward to her contributions in times to come.

Like many other noble Lords, I looked at this Bill and simply read “Planning Bill”. It seems to me overwhelmingly so and that is where I wish to contribute. In this regard, I fear the Bill has missed important opportunities. I declare my property interests as in the register and as a former chartered surveyor.

As a former member of the RICS, I will begin with a brief reference to Clause 213, which follows the Bichard review—I do not see the noble Lord in his place, but he may be speaking later. It is a very short clause, with five subsections. The RICS deserves this close focus from us following the mess it has got itself into in recent years. My only amendment would be to extend the period between compulsory internal reviews to 10 years rather than five, to avoid the risk of a process of almost continuous review.

I too am interested in the briefings from a number of charities and other lobby groups. Generation Rent referred to 29 homes a day being lost from the rented sector. Transferring these thousands and thousands of homes to holiday accommodation and short-term rentals brings a significant tax benefit to investors and a severe loss of tax revenue to the councils concerned. The investor benefits are non-domestic rates, where there are reliefs for small businesses; mortgage interest offsetting, which is not available to home owners; and a less stringent regulatory environment. Yet these changes of use from homes to short-term lets increase local resentment from communities unable to match the deep pockets of the highly geared investors. Much higher loan-to-value mortgages are available to businesses than through the affordability tests required of young, aspiring families wishing to live in their traditional communities. This should be a central plank of the Bill.

The Shelter report has been referred to. That under 3,000 social rented homes were provided in 2022 from Section 106 agreements is a complete disgrace. With council house waiting lists at 1.2 million, that provides less than 0.25% of the council house waiting list requirement—it does not scratch the surface. Since 1980, almost 2 million social housing unit sales have taken place. I agree with the noble Baroness, Lady Thornhill, that we must abandon “affordable”. It is out of context. We must focus on social housing. We are faced with a crisis in social housing, and this Bill is a great opportunity to fix it, but it fails. What will ensure the provision of social housing? The noble Baroness, Lady Warwick of Undercliffe, made this point very clearly.

There are positives in this Bill. There is more local focus, and it is better plan led, but, frankly, housing is meant to have been plan led for years. The focus on heritage assets is good, enhancing enforcement powers is vital, and increasing planning fees is welcome. However, the 12 levelling-up missions at the start of the Bill are all very well, but they read as big woolly statements that count for little. Principal among the negatives, in my view, is the resourcing of planning departments. These are the crucible of good planning decisions, and yet for years there has been a crisis of turnover in planning departments from the planning professionals. There is a shortage of experienced and skilled planning individuals. There is a huge financial resource problem. The prohibitive costs of appeals stop a lot of planning authorities or councils engaging in fighting decisions that they think mistaken and that have been forced against them.

This Bill is the best opportunity for years for more numerous social housing units, which must be provided. That crisis is just getting worse.

Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022

Lord Thurlow Excerpts

Tuesday 20th December 2022 Lords Chamber

[Lord Shipley (LD)]

My Lords, I declare my vice-presidency of the Local Government Association. I too welcome the regulations, with some caveats. I agree with the noble Earl, Lord Lytton, that they are welcome and long overdue, and I agree with many of the points that he made, not least on the need for the reform of the business rates system. I am looking forward to hearing the Minister’s reply to his specific points.

The Government have made the right decision to press ahead now with implementing the revaluation because it reflects changes in market value since 2015, a period now of eight years. The decisions on the transitional relief scheme seem appropriate since they will give targeted support for the next five years to those businesses facing increases in their bills, in very difficult economic circumstances; they will freeze the multipliers in 2023-24; they will give extra, specific help to the retail, leisure and hospitality sectors; they will provide extra protection for small businesses that have lost rates relief because their property has been revalued upwards; and, as the Minister said, they will give some 300,000 businesses entitled to reductions an immediate and full implementation of the fall in their bill by ending the policy of downward caps. Welcome though all that is, it represents a temporary fix to a system that has not been working well and needs reform, as the noble Earl said.

The Government have brought forward the next revaluation to 1 April 2026, just over three years away. In my view that is the right timing because rental values, and thus rateable values, over the next three years may face pressures, given the overall state of the economy. It will also present an opportunity to take further account of online retailing. As part of this revaluation, total business rates paid by the retail sector will fall by 20% but the bills of large distribution warehouses will go up by 27%. That is welcome. As the letter dated 16 December from the Financial Secretary to the Treasury says:

“It is right that those sectors that have seen significant growth since 2015 pay their fair share of the tax burden.”


I agree, but the question remains: are they paying their fair share?

I have concluded that we still need a review of the business rates system. I hope that during our debates on the Levelling-up and Regeneration Bill we can examine how that might be approached, because we need more control of business taxation at a local level. I hope we will discuss how that might be done.

[Lord Thurlow (CB)]

My Lords, I declare my interest as a former chartered surveyor, and one who worked in the dark ages in the world of rating. As a former chartered surveyor, I opened the statutory instrument with interest and excitement, and, as we heard from the noble Earl, Lord Lytton, found it was full of what I thought was trigonometry: pages 4 to 26 were theorems, fractions and things that I certainly did not understand. But the objective of the regulations is clear, and I support them.

The position of non-domestic rates has become, I am afraid, a shambles over a number of years. A failure of the authorities to remain abreast of trends in rental value—rateable value should be based on the revaluations in the commercial property markets—has led to a gross imbalance between sectors and, in some cases, competing users within single sectors. That is gross unfairness. This certainly applies to hospitality and leisure sectors, and, in some cases, competing uses, with traditional retail perhaps being most affected.

For several years now, the Government have failed in their promise to address the unfairness in commercial rates to deal with the likes of Amazon, as we heard from the noble Lord, Lord Shipley, and to allow our high street retailers to compete with these big-box retailers. They have a much lower cost of delivery model, and that cost is further increased by the rateable value system. Although we have heard that a 40% increase in industrial and warehouse rates, and a 20% reduction for retail, are proposed, this is de minimis in real terms—it is tiny, and it is not a percentage on like-for-like terms. A 40% increase in industrial rents of £10 a foot and a 20% reduction in the rent of zone A shops of £150 a foot are absolutely not comparable. That needs to be spelled out and made clear, and the Government need to do a great deal more very soon. This injustice continues to be kicked into the long grass at the expense of our high streets, and the important social benefits that they provide continue to decline.

This statutory instrument accelerates the reduction across the piece in non-domestic rates and feathers the increases for those suffering an increase over several years—both of these are to be welcomed. Similarly, freezing the rate poundage is also to be welcomed. The current levels of approximately 50p in the pound are the absolute maximum that businesses can stand. I support this statutory instrument and request that the Minister confirms that there is to be comprehensive rating reform very soon, as earlier speakers have requested.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for her introduction. As we heard from her and other noble Lords, the SI gives relief to businesses, particularly to help them cope with next April’s increase in business rates. We know that many businesses have been struggling following the pandemic, and this, combined with rising energy bills and high inflation, means that they need further support.

While we very much welcome the Government’s provision of relief, we do not think that the regulations go far enough. The Labour Party has been calling for an increase in the threshold for small business rates relief from £15,000 to at least £25,000, because the burden of business rates is disproportionately heavy on small businesses, as we have heard from other noble Lords. Having said that, we do not want to impede the passage of the instrument going forward.

I will ask the Minister a couple of specific questions. Part 10 of the draft Explanatory Memorandum considers the consultation outcome. It says that:

“A total of 102 responses were received”—


despite the instrument intending to help around 700,000 businesses—and that only “16 local authorities” responded. Can the Minister say whether the department feels that there is a reason for such a low response to the consultation? Because of that low response, what further steps have the Government taken, or are intending to take, to engage with those who are affected? We may hear, in broader terms, many of the concerns that have been raised by noble Lords previously in the debate.

The noble Baroness, Lady McIntosh of Pickering, asked about timescales; similarly, I will ask about the fact that we are debating the instrument only today. The instrument comes into force on 31 December, which means that it needs to receive parliamentary approval before the Christmas Recess. But given that the consultation finished in the summer, why has it been left so late to approve it? The Local Government Association made it clear in its response to the consultation that any transitional arrangements for 2023, whether part of the formal scheme or supplementary, should be announced no later than the autumn that has just gone, when the draft list of provisional multipliers was announced. We are debating this on the penultimate day before the Recess, so can the Minister shed any light on why the House has not been given the opportunity to scrutinise it any sooner?

I will make some brief comments on the points made by other noble Lords. The noble Earl, Lord Lytton, and the noble Lord, Lord Shipley, made very pertinent points; I will not repeat them, but we need to consider much of what has been said here, particularly when we consider the pressures on our high streets. I have seen so many shops close down in my local high street since the pandemic, and there is a real worry about how high streets will get back on their feet again. On that point, the noble Lord, Lord Thurlow, talked about competition, looking, for example, at the costs that Amazon has compared with our retailers on the high street. Those are really serious matters, and, if we are serious about rejuvenating our high streets, we must look at how we manage that through the way they are charged and operated under the business rates system.

Building Safety Bill

Lord Thurlow Excerpts

Committee stage
Monday 28th February 2022 Grand Committee

[Baroness Fox of Buckley (Non-Afl)]

I know that noble Lords have been waiting with bated breath.

The key question is why building safety managers are needed at all, when the vast majority of leasehold developments have managing agents in place and leaseholders have to pay a management fee for their services. Surely splitting the function would risk disputes between property managers and building safety managers about what is and is not a safety issue and who is in control when remediation works have a safety element. These buildings, which people live in, already have fire risk assessments carried out by specialist firms—even if one problem is that they are not shared with leaseholders, which can mean that defects can be kept hidden and necessary repairs delayed. But still, what will the building safety manager actually do?

To find out—I do not know whether the Minister has seen this—I watched a recording of a closed-door meeting of sector professionals trying to pin down the role. It was full of flip charts, pie charts and Venn diagrams, and I was utterly confused by the end. It seemed to me to be a jack of all trades and master of none, but it needed the authority of a professional expert. It was reminiscent of a scene from David Brent’s “The Office”.

These are compulsory jobs but they are not mandated to a minimum standard. Qualifications for the role have not been established, no training programmes are in place and, as I say, even the professionals themselves do not seem to know what that training would consist of. If this post is made mandatory, as proposed by these clauses, the qualified few will surely be able to write their own salary cheques. No wonder that leaseholder campaigning groups are talking about “jobs for the boys”. Even if that is a bit cynical, we must ask who will judge their performance or hold them to account. Leaseholders—who will pay for them and who are best placed to judge those overseeing the block they live in, due to day-to-day interactions—now say that, as always, they will have no say at all.

Safer homes will come not from employing someone to march around a block of flats, trying to find issues to justify their existence and quite a hefty salary. This is a version of the waking watch debacle, replacing hi-vis jacket patrols walking around buildings looking for sparks with a suited and booted manager with an iPad finding risks, faults and unnecessary fire safety work. If they do not find any problems, what is the point of their job?

I finish with that question. What is the point of the job? I hope the Minister agrees that there is no point.

[Lord Thurlow (CB)]

I support the very interesting comments of the noble Baroness, Lady Fox—most interestingly, it is immensely refreshing to listen to an amendment that is driven not only by cost savings for leaseholders but by common sense. In many cases, the sub-contracting of services on multi-let buildings is appointed through external managing agents, who apply a levy; they will charge, let us say, 10% on the fee for the work being done. In the £60,000 example, another £6,000 goes on to the tenants’ bills at the end of the year.

I simply support this proposal. It will be a difficult one for the Minister, but common sense is short in the Bill because of the layers of bureaucracy. This will save money for tenants.

[Baroness Pinnock (LD)]

My Lords, I am very grateful to the noble Baroness, Lady Fox, for raising this issue about the necessity for a building safety manager in every block—this is of course in relation only to higher-risk buildings. However, residents in higher-risk blocks will have a managing agent, to whom they pay a fee—a service charge—who appoints an accountable person, for whom there will be an additional cost, and possibly a principal accountable person, if that is necessary. On top of that, each block will have to have a building safety manager. As the noble Baroness, Lady Fox, pointed out, adding on those roles considerably adds to the costs for each of the leaseholders; their service charge will rise considerably as a consequence.

I too have had discussions with some of the cladding campaign groups about the potential £60,000 role and the costs which will pass inevitably to them. They are very anxious that their lease will suddenly become unaffordable due to the piling on of costs from these roles.

The further issue in my mind is, as I think the noble Baroness, Lady Fox, said, that there is a duplication of roles. Equally, when there is a confusion about roles—each block might have three people who potentially have conflicting roles—building safety risks will fall between the three. I can find nothing in the Bill that says how each will be accountable. In the end, we come back to this: quis custodiet ipsos custodes—to whom are they accountable?

The Explanatory Notes gives us this as an example:

“The Building Safety Manager may be carrying out day to day functions, as set out in the agreement with the Principal Accountable Person, to assist the Accountable Persons in discharging their statutory obligations. However, the Building Safety Manager could choose to resign of its own volition, and conversely the Principal Accountable Person may find that the service provided by the Building Safety Manager is below standard and choose to dismiss that person. In both circumstances the Principal Accountable Person would need to replace the Building Safety Manager as soon as reasonably practicable.”


I hope everybody understood that. That is my argument: it becomes confused.

One of the issues with building safety and fire safety is that it needs clarity and simplicity. This is not clear and simple. I believe I raised at Second Reading the issue of too many rules causing confusion. When nobody really knows who will do what, it is always a recipe for a potential disaster.

Those are the two points: costs and duplication leading to confusion. The question is this: to whom are they finally accountable—the accountable person or the managing agent? It is not very clear.

The other point is about the competencies—a horrible word—of potential building safety managers. I could not find anywhere in any of the clauses which set out what those should be. The Bill talks about standards but it does not say what they will be. What should be expected of these folk?

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[Lord Khan of Burnley (Lab)]

Sometimes they are wise men and women. I hope that the Minister can take forward their wise suggestions on this group of amendments in particular.

We welcome many of the government amendments, tabled in good spirit to make sure that life gets better for residents of buildings across the country and that they are free from unsafe situations. Government Amendment 141 makes provision for regulations under the new clause relating to costs contribution notices to be subject to the draft affirmative procedure. I want to ask the Minister about the power given to government to make new legislation. What scrutiny will these new powers be subject to?

The noble Lord, Lord Young of Cookham, and the noble Earl, Lord Lytton, talked about the important issue of long leases. It is a fascinating debate, but perhaps it is not for now, because this Bill is about building safety. When the noble Lord, Lord Young, was a Minister in 1984, I was five—in fact, I was a safety hazard in my parents’ building at the time. His point about the future of long leases is important, and I am sure it will be discussed and debated in a future Bill. I also appreciate the experience brought by the noble Earl in discussing his points.

The noble Lord, Lord Stunell, made an interesting and very important point about product safety. It is difficult to digest. Even the Construction Products Association is confused about this area. There is a lack of clarity which I hope the Minister and the Government will address.

Finally, I will single out Amendment 147, in the name of the noble Baroness, Lady Neville-Rolfe, which looks at publishing assessments of the impacts on businesses, in particular, of remediation changes. It is an important amendment because there is a shortage of homes and we want to make sure that we look at how this impacts on everybody in the whole chain and that we do not move to a situation where we are building fewer homes. That is an important point, but today has to be about impact assessments on citizens of this country and every person living in an unsafe building.

The Minister in debate on a previous day mentioned that this is a landmark Bill and an opportunity. Unfortunately, at this moment it is not being taken forward with the really strong, meaningful, well-intentioned and well-purposed amendments that have been presented, so I hope that the Government will reflect, listen and make that impact.

[Lord Thurlow (CB)]

Before the Minister stands up, perhaps I can make two points. This is a large group of quite diverse amendments. My concern is over the accountable person role. Judging by the discussion today—I will not go through the list of different contributions—I think it is going to be a very difficult job indeed. That person is going to need help in creating a co-operative working relationship with tenant groups, and the situation could be exacerbated by bad and difficult freeholders or managing agents, often in league, and if the accountable person finds himself or herself in their pocket it will not be made any easier.

I do not overlook difficult leaseholders. There are some tenants who will not let anybody into their building. That is also a problem to be dealt with, but I have two suggestions. The accountable person should be prepared to prove reasonableness in all their behaviours and should also be prepared to prove value for money. An autocratic manager refusing to engage with a leaseholder makes life even more difficult. In the second case, concerning value for money, whether it is the fire extinguisher example given by the noble Lord, Lord Blencathra, or some captive insurance company or an arrangement with a very high commission-bearing insurer offering kickbacks to freeholders, that would be avoided.

[Lord Greenhalgh (Con)]

My Lords, I rise to say how amazed I am by how young the noble Lord, Lord Khan, is. I thought I was a whippersnapper as someone in my mid-50s, but the noble Lord must have been born in—what, the late 1970s?

Building Safety Bill

Lord Thurlow Excerpts

Committee stage
Thursday 24th February 2022 Grand Committee

[Lord Thurlow (CB)]

Forgive me butting in at the end but before the Minister responds, I thought that I should make a further point in connection with the amendments of the noble Lords, Lord Blencathra and Lord Best.

It is a reminder that the property development industry, when undertaking projects of blocks of flats or groups of houses—projects of medium size upwards—used to employ a clerk of the works. I am not sure whether it has been a mandatory appointment within the chain of building command, but the clerk of the works was defined as someone onsite who inspected workmanship, its quality, the safety of the work being done and, importantly, reported to senior managers and clients.

Inevitably, lack of mandatory appointment requirements and fewer and fewer clerks of works on projects led to shortcuts and poor workmanship. A clerk of the works might cost between £50,000 and £100,000 a year. For the employer, that could be significantly more, given all the on-costs. On many projects, that adds up to millions of pounds,. So of course those appointments became redundant in the eyes of the bean counters. That simply underlines the importance of the ombudsman’s role, its independence from the industry in absolute terms and the period of time limitations within which claims can be brought.

[Lord Greenhalgh (Con)]

My Lords, I had not thought that this debate would take quite so long, but it has been worth listening to every second of every minute. I thank the noble Lord, Lord Thurlow, for that late intervention because we have unlearned a lot of the practices that led to a higher quality of build. We would not be in the mess we were in if we had not unlearned some of the things that we did so well during the Victorian period, when there was a way of building using pattern books. Everything was essentially a process, which the Edwardians developed further. Somewhere along the line we have lost that desire to build quality. Just imagine if the Romans came back from the dead to look at what we were building over the past 30 years in the 90s, the noughties and the 10s. They would be absolutely appalled at the standard of build. They did not build their temples to last 10 or 15 years but centuries. We have got to learn that quality of our built environment matters. I thank noble Lords for raising some of their points.

One of the objectives of the Bill is not just to create a regulatory system that works but to raise the competence of an industry that has cut corners and, as the noble Earl, Lord Lytton, said, effectively gamed the system. We have to get back to the culture around quality, competence and professionalism. That will take not just legislation but an attitude of mind.

I start by responding directly to the noble Lord, Lord Stunell, around impact assessments. He is absolutely right. The government amendments came thick and fast. My entire weekends have been ruined since the beginning of the year, working at pace as we approved a plethora of amendments. It is fair to say that the sheer pace of this has meant that it has not been possible to look entirely at the impact. We just know that they are the right lines, and the impacts will be looked at in due course—my response says, “We are looking at the impact of the government amendments and will publish an assessment in due course.” We have been working very fast to get this right in the time we have, and we thought it was very important that we were ready to have these discussions in Committee of government amendments before we get to the even more serious business of Report.

I shall respond to the noble Baroness, Lady Pinnock, supported by the noble Baroness, Lady Hayman of Ullock, about Clause 126 and intruding on the powers of the Senedd. We have worked closely with the Welsh Government across all areas of the Bill to develop and agree measures that work for England and Wales. The Welsh Government have agreed the measures applying to Wales and we expect legislative consent in due course.

I have had a number of ministerial meetings with my counterparts in the devolved Administrations, and there are lessons to be learned from the Welsh approach to the building safety crisis—and, indeed, from my Scottish and Northern Ireland colleagues—on this issue. It affects all our nations in this great United Kingdom, and we have a constant dialogue as we grapple with it, but it is fair to say that the lion’s share of the problem lies in our big cities here in England. That is not to say that we are not learning from the Welsh and others, and of course we will not ride roughshod over them. I hope that gives the noble Baronesses, Lady Pinnock and Lady Hayman of Ullock, some reassurance.

I thank my noble friend Lord Blencathra for bringing forward his amendments, which are clearly aimed to impose greater punishment on those who breach building regulations. I thank the noble Baroness, Lady Hayman of Ullock, for mentioning a breach of the regulations, probably around the time when my noble friend Lord Young was the Housing Minister. I do not know whether he was responsible for the 1984 building regulations—he was. We have the living history in the Room, in the person who brought them forward. Do you know what I was doing in 1984? I was doing my A-levels, and here we have the Minister who brought forward the building regulations in 1984. That is the kind of place we have: people with decades of understanding of these issues.

It is a crime to breach building regulations. If you commit a crime in this country, there is no statute of limitations—I know that from being Deputy Mayor for Policing and Crime—so people can go after you after any period. I have huge sympathy for the intent behind there not being a short period of time, and it is important that we recognise that breaches of building regulations are criminal; that cannot be said often enough. I thank the noble Baroness for raising that again, and the Government have sympathy, but I fear we are unable to accept my noble friend’s proposals, as I intimated in my opening speech.

Looking first at Amendment 13, we consider that the changes are unnecessary for a couple of reasons. First, for some years now, the magistrates’ courts have had the power to impose unlimited fines—and fines are, of course, the principal punishment available in respect of corporate bodies, which are most likely to be in a position to commit the offence of breaching building regulations.

Secondly, it will not have escaped your Lordships’ notice that significant backlogs have developed in the Crown Court over the past two years as Covid protocols have been introduced. The costs to the courts service, the prosecution and the defence are also far higher in the Crown Court.

As was raised by the noble Baroness, Lady Hayman of Ullock, it is quite possible for the building regulations to be breached in a relatively minor way. In such cases, it would be entirely appropriate for the case to be dealt with by the magistrates. It is, of course, also possible for breaches to be extremely serious, which is why the Bill for the first time allows cases to be dealt with in the Crown Court, in the same way as crimes are dealt with: sometimes in the magistrates’ court, sometimes in the Crown Court. However, we do not consider that it would be sensible to require all breaches of the building regulations to be dealt with in the Crown Court.

Turning to Amendment 14, I say to my noble friend that I agree with increasing the daily rate of fine for ongoing offences. Indeed, the Bill already increases the daily rate from £50—where it has been since 1984, when I am sure it was set by my noble friend Lord Young, when £50 was a considerably greater sum of money than it is today—to £200, which is the current rate for a level 1 fine. However, we consider that increasing it further to £2,500, as my noble friend proposes, “would be disproportionate”—that is what it says here, anyway.

The principal aim of the prosecution must be to impose an initial fine commensurate to that particular offence; any further fine should merely encourage work to be put right, rather than imposing huge additional punishment. We consider the potential maximum of £5,600 for the month of February is likely to be significantly more proportionate on top of the fine imposed on conviction, rather than the £70,000 proposed by my noble friend.

On Amendment 15, imposing a sentence according to a mathematical formula raises a number of issues. First, the cost of the work done will not always be clear; there may be disputes about the cost in the invoice or the value of the work actually done, and resolving this would take up the court’s valuable time. Secondly, the court might consider that, in a particularly egregious case, a significantly higher fine is required than one that would be arrived at from the calculation. The amendment would preclude the court from imposing that higher fine. Finally, the provision in the amendment to enable the court to impose rapidly escalating further fines, if the breach remains unresolved, has the potential to lead to significant unfairness—as, for example, a £10,000 initial fine could total up to £70,000 if a breach remained unresolved for just two months after conviction.

As I said at the start of my remarks, while I am supportive of my noble friend’s amendments, I hope that with this explanation he will be content not to press them. I reiterate that I absolutely sympathise, and want to go with the nature of this—but that is the response to the amendments as tabled today. I thank my noble friend for laying the amendments for us to think them through and debate them extensively.

Before turning to the comments from the noble Lord, Lord Best, about strengthening the teeth of the new homes ombudsman, it is important to reflect that there has to be a little bit of work done to tidy up the whole approach to the ombudsman’s service for people in housing. I asked my colleagues behind me to list the number of people who provide a complaints service for people in different types of homes and tenures. We have the new homes ombudsman, which will be unleashed for new build, but we also, as the noble Lord, Lord Best, will know, have the Regulator of Social Housing and—my old colleague at City Hall, Rick Blakeway—the Housing Ombudsman Service, and we have the Local Government and Social Care Ombudsman. Homes are homes, and we need to think about how we get a complaints service that works for homes in the round. I know that we can categorise social housing as being over here, and people in private renting over there, but these are people’s homes. We need to recognise that, at the moment, it is a patchwork quilt of services that provide that whole ombudsman service, and that is not ideal. I wanted to put that forward—that, when discussing this subject, we are talking about new-build private homes and not housing in the round.

I turn to the amendments tabled by the noble Lord, Lord Best. I thank him for raising this important matter, but I am afraid that the Government will not be able to accept these amendments, as the intention can be achieved elsewhere. The Bill sets out requirements for the ombudsman scheme to include provision about what home buyers can complain to the ombudsman about in individual cases, and making improvement recommendations about scheme members’ quality of work and conduct in general. The developers’ code of practice allows the standards of conduct and standards of quality of work expected of members of the scheme to be set out.

The noble Lord’s amendments would provide the ombudsman with powers to make general requirements of the scheme’s members, duplicating provisions already in the Bill. It is unclear how they could be enforced or appealed against, and we must be careful that the ombudsman does not duplicate the role of regulators, the scheme provider or Parliament. The Bill includes provision for complaints to the ombudsman within two years of the first acquisition of the new-build property, which aligns with the developer liability period under most new-build warranties. I was shocked to find out that within a warranty it is for the first two years that developer liability is covered; the rest is covered through some form of warranty or insurance scheme to 10 years in private housing or 12 years in social or public housing. It is in this period that issues are much more likely to be raised in relation to snagging or the home-buying process. We believe that the proposal to extend this to six years would be unnecessary and would introduce a new unknown burden on members of the scheme. But I assure noble Lords that home buyers will retain their existing rights to seek redress in law and elsewhere in this Bill. With this reassurance, I hope that the noble Lord will be content not to press his amendments, and the Government will continue to consider how and where practices in this area could be improved.

I did say—if I may go a little bit further on that note —that we need to think about warranties, but we should also remember the Defective Premises Act, which has a statute of limitations of only six years. We are proposing to extend that prospectively to 15 years, hoping that there will be a culture change and a stronger regulatory environment, and 15 years is a reasonable timeframe to expect to seek redress—and then, retrospectively, 30 years. I am having those discussions and debates with my colleagues and the noble Lord, Lord Stunell, because I consider breaches of regulations, even going back 25 or 28 years, as a crime. It is a crime to breach building regulations, and there should be no statute of limitations for some of the crimes that we have seen, where we are putting flammable materials on the outside of the buildings, not having compartmentalisation, and having inadequate fire stopping, or fire doors that do not act as fire doors. All that I consider to be essentially breaches of building regulations, and we need to go after the perpetrators. But that is for another group of amendments—for the perpetrator pays or polluter pays—in due course.

Building Safety Bill

Lord Thurlow Excerpts

Committee stage
Monday 21st February 2022 Grand Committee

[Lord Thurlow (CB)]

My Lords, I want to say a few words on PDR. It has been well exercised. First, I should declare my interests: I have practised for many years as a chartered surveyor and have two buy-to-let properties.

PDR is mentioned specifically by the noble Lord, Lord Shipley, in Amendment 135 and in Amendment 43 by the noble Baronesses, Lady Hayman of Ullock and Lady Pinnock. I think that PDR is a time bomb, I am afraid; I am sorry to say that. Conversions of redundant office buildings allowed as of right led to poor-quality developments. They are multi-let properties with many risks involved, and they are very recent conversions. They are taking place as we speak with little supervision. Developers who ignore the simple standards of fenestration, minimum square footage for a decent life, thermal insulation and other such things, as is happening today, are unlikely to respect building safety issues. PDR was hasty legislation. It was poorly thought through, then there was a scramble to tighten it up as it was extended. It is essential that this Bill addresses the PDR problem. I started by saying that it is a time bomb. If the Bill does not address it, it will go off. There will be tragedies as a result of PDR and those in society who are least able to defend themselves often end up as the tenants.

[Lord Greenhalgh (Con)]

My Lords, I think I should start by dealing with something that probably relates to the previous group. I am sorry that so many noble Lords have had such arduous journeys to get to the Moses Room today and then, having journeyed so far and so slowly, come to a Room that is so positively chilling. It is quite arduous at the best of times.

Just for clarification, in answer to the noble Baroness, Lady Pinnock, the high-risk regime includes hospitals and those care homes of six storeys and above. Essentially, it is those around 18 metres—there or thereabouts—but not in occupation, because different regimes apply to them, although the fire safety order applies to the whole built environment. I hope that gives clarity on the current scope.

I set myself the task of trying to encapsulate quite a varied set of amendments in each group in three words or fewer. I have called this the “strengthening building regulations” group: I will try and get three words down to two the next time I have to do this. I thank noble Lords for their contributions to what has been an interesting debate. I will respond to each amendment in turn.

I thank the noble Lord, Lord Stunell, for his amendment giving the building safety regulator the power to make building regulations under paragraphs 4A and 4B of Schedule 1 to the Building Act 1984, as inserted by the Sustainable and Secure Buildings Act 2004. However, I am afraid that the Government will not be able to accept this amendment as his intention has already been met in the Bill. We are introducing a more stringent regulatory regime in design and construction for higher-risk buildings, as defined in Part 3. The higher-risk regime will be the responsibility of the building safety regulator. We are also making wider changes to the Building Act 1984 that will apply to all buildings.

I point out to your Lordships that Sections 8 and 9 of the Sustainable and Secure Buildings Act 2004, referred to in the amendment, insert paragraphs 4A, under “Certification of work”, and 4B, under “Appointed person and management of works” into Schedule 1 to the Building Act 1984. As part of our improvements to the 1984 Act, the Bill repeals those paragraphs and replaces them with more effective powers via Clauses 32 and 33. These are more effective, stronger and wide-ranging powers. Clauses 32 and 33 provide powers for building regulations to set procedural requirements relating to building control, the issue of notices and certificates and requirements regarding appointments. They include setting out duties to be imposed on relevant persons in relation to building work. We also consider that the power to make building regulations should remain with the Secretary of State. This will ensure a consistent approach to all buildings; the Bill already provides that the building safety regulator will be able to advise the Secretary of State should it consider changes to the building regulations to be necessary. I thank the noble Lord for suggesting these amendments and respectfully ask him not to press them.

I always get worried—this is a new combination, as they say—when an amendment brings the noble Baronesses, Lady Hayman and Lady Pinnock, together. On Amendment 11, it is the Workington warrior and the Yorkshire terrier combined. I am trembling in my boots at the thought of Amendment 11 but let us look at it carefully. I thank the noble Baronesses for raising this important matter but I am afraid that the Government will not be able to accept this amendment. The Bill takes a proportionate approach to building control. In the new system, all building inspectors, regardless of whether they work for local authorities, the building safety regulator or registered building control approvers, will need to register with the building safety regulator. As part of the registration process, they will have to demonstrate their competence by meeting certain criteria.

A new framework of operational standards rules will define the minimum performance standards that building control bodies must meet, and the building safety regulator will monitor and analyse the performance of building control bodies to drive up standards across the sector. Registered building control approvers and building control authorities will need to obtain and consider the advice of a registered building inspector before carrying out certain building control functions and use a registered building inspector to undertake certain activities. This greater scrutiny and accountability will provide greater incentive to ensure all buildings, including non-higher-risk buildings, are safe. With that explanation, I respectfully ask the noble Baronesses not to press their amendment.

I turn to Amendment 43. I thank the noble Baroness, Lady Hayman, for raising this important matter. I am afraid the Government will not be able to accept the amendment, as our assessment is that it would not achieve its intended effect. I assure the noble Baroness that paragraph 1 of Schedule 1 to the Building Act 1984 already allows for the making of provision in the building regulations for all categories of buildings, as do the new powers that we are taking in Clause 32.

We are introducing a more stringent regulatory regime in design and construction, led by the building safety regulator, for high-rise residential buildings, care homes and hospitals that are 18 metres or more in height, or at least seven storeys, known in the Bill as “higher-risk” buildings. Those buildings to which this more stringent regime applies have been chosen to ensure that the regulation is proportionate to the level of risk, should a spreading fire or structural failure occur. We do not think it appropriate to apply the entire regime to all buildings. However, where appropriate, we intend to make elements applicable to all buildings, such as the duty-holder and competence requirements, which will apply to all building work where building regulations apply.

I turn to Amendment 127. I again thank the noble Baroness, Lady Hayman of Ullock, for raising matters relating to flood resilience. I appreciate the passion with which she outlined her desire to get this issue addressed, particularly in new homes, but I am afraid the Government will not be able to accept this amendment. I assure her that there is already a well-established regulatory system in place to ensure new homes have necessary flood-mitigation measures in place. The National Planning Policy Framework is clear that inappropriate development in areas at risk of flooding should be avoided. Where development is necessary, it should be made safe and resilient without increasing flood risk elsewhere. Policies in that framework must be taken into account in preparing the local authority’s development plan and are a material consideration in planning decisions.

The new clause that the noble Baroness, Lady Hayman, has proposed would require flood resilience measures to be introduced into the building regulations. Statutory guidance to the building regulations, in approved document C, already promotes the use of flood-resilient and resistant construction in flood-prone areas. Part H of the regulations also sets requirements for the rainwater and surface water drainage of individual buildings. The main sewerage system for a development is governed by the sewerage undertaker for the area—for example, Thames Water. The sewerage undertaker has the ultimate responsibility for ensuring that drainage systems for new developments are built to a resilient standard that minimises flooding, and these duties sit outside the building regulations system.

I thank the noble Baroness for suggesting the amendment. I hope I have reassured the Committee that the Government already have well-established means of making sure that consideration of flood risk and flood mitigation is thoroughly accounted for in the planning system, and that approved document C already promotes flood-resistant and resilient construction. For these reasons, we believe that introducing new requirements into the building regulations is not necessary.

I thank the noble Lord, Lord Shipley, for reminding me that I should probably declare my commercial and residential property interests—none of which has any cladding issues—as set out in the register, specifically on the amendment around permitted development rights because I have benefited from those in the past, though probably will not do so in the future. I recognise the risk that he has outlined and that is why I thought I should declare those interests.

Amendment 135 seeks to ensure that homes delivered under permitted development rights—PDR—for change of use to residential meet the provisions of this Bill. I thank the noble Lord, Lord Shipley, for raising this important matter, but I am afraid the Government will not be able to accept this amendment. This is getting quite repetitive, really, is it not? However, the noble Lord is raising an important point and I assure him that planning permission, whether granted by a permitted development right or following an application to the local planning authority, does not remove the need to comply with other legal requirements. That means all new homes and buildings must meet, for example, the relevant building regulations and fire safety requirements, as well as any other legal requirements required under other legislation, regardless of whether they are permitted through a permitted development right or following an application for planning permission.

We introduced a number of new requirements into the planning system, called planning gateway 1, from 1 August 2021. These ensure that fire safety matters as they relate to land-use planning are incorporated at the planning stage for schemes involving a relevant high-rise residential building. For schemes that use permitted development rights, a similar requirement has been introduced. Through new prior approval processes, proposals to create a relevant high-rise residential building under the rights require submission of a statement about the fire safety design principles, concepts and standards that have been applied to the development. Consultation by the local planning authority with the Health and Safety Executive is required for residential buildings of 18 metres or more in height or seven or more storeys, whichever is reached first.

Once again, I thank noble Lords for this interesting debate. I hope that I have given some reassurance on each amendment, and that noble Lords will now withdraw or not press their respective amendments.

Building Safety Bill

Lord Thurlow Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Thurlow (CB)]

My Lords, I declare conflicts of interest in owning two buy-to-let flats in London and as a member of the RICS for some 30 years. This Bill is long-awaited; Grenfell is nearly five years ago, and the Bill is long overdue. It sets out clear improvements in the system going forward, and I am keen to support it in principle, but I believe that it contains inadequate protections for existing leaseholders, particularly occupiers of existing older buildings, and certainly including those below the 18-metre height restriction or seven-storey levels.

Other noble Lords have talked about this, too. The principal thrust of the Bill is, of course, to protect lives, particularly those of residents. Yet looking at the Bill, I question whether it is not more building focused than people focused. Of course, one leads to the other, but the focus should, I think, be on the people, and that will manifest itself in different ways. One example is in costs of occupation, which are going to rise as a result, through additional service charge recoveries. It is wrong to expect tenants to pay 100% of the annual costs anticipated by the Bill. Another example is access to redress for leaseholders; the process sounds straight- forward but, as we have just heard, for many it will be a formidable mountain to climb, with layers of bureaucratic overlaps, probably requiring costs that many can ill afford. I hope that the Minister will confirm that this will not be the case. I was much encouraged by his remarks at the beginning of this debate.

For those living in older buildings with a heightened fire risk, particularly since Grenfell, the costs have sometimes been crippling. As we have heard, there have been huge remediation costs, soaring insurance costs, waking watch Bills and the mental health consequences for many, to say nothing of being bled dry financially, with no prospect of selling at value. We have all heard of examples. The Minister refers to protecting leaseholders, but will it be comprehensive? If this Bill sets out to protect people, leaseholders should be at the front of the queue.

I would like to touch on building ownership. Excluding social housing, existing private residential blocks may belong to City institutions or public property companies, transparent organisations. Many will belong to private property companies; some belong to private individuals—and this number is likely to be much higher than most people realise. Many are discrete operators attempting to remain below the radar and anonymous. They can camouflage ownership, probably further protected by managing agents to whom the owners themselves will sometimes be very closely linked. This will confuse and frustrate leaseholders, who will easily give up their quest for redress. I know there are provisions for building safety managers, accountable persons and regulators, but without transparent ownership, I do not understand how redress can be effectively enforced in all cases. I think there should be transparent ownership details available, identifying owners or shareholders rather than corporate vehicles often registered offshore, as the noble Lord, Lord Young of Cookham, referred to in his speech.

Let us consider why investors own these assets. They are investments; they expect to receive rents, net of all costs. Costs are usually redirected to residents via service charges. As I mentioned, the Bill is likely to increase those annual charges to occupiers. I suggest these costs should be paid by the building owners, or at least be shared. It is not enough to assume investors may protect their investments by deflecting unexpected costs on to their residents to protect returns: their assets are, after all, being improved. I repeat: I believe the future costs set out in the Bill should be more equitably shared.

For occupiers, rights of redress are critical. I have mentioned some of the practical difficulties, but the Hackitt report stated that this Bill should reassert the rights of residents. It will not be easy nor cost-free, as items creep into service charge bills. The costs of fire safety works could be shared between freeholders and leaseholders, though there is a strong case to exempt leaseholders altogether. One normal risk of property ownership is things going wrong. Every property owner with an old house or a flat in an old building knows that it goes with the territory. Insurance is available and is the owner’s responsibility. This should not be a tenant risk; however, it usually is.

What of older buildings which fall short on safety grounds, those below 18 metres or the seven-storey threshold? I join many others in referring to this sector—in particular the noble Baroness, Lady Harris, just now. These deserve more attention, particularly to protect leaseholders from risks and costs. I would not want to live in an old building on the sixth floor, just below the 18-metre threshold, which did not make the Bill’s cut, and be trapped up there, six storeys up. If there is to be a height limit, there is a strong case for two or three floors. What then of vulnerable people? We have heard about this too. If this Bill really wants to put the interests of residents first, these out-of-scope buildings should be included but treated differently as circumstances and assessors consider appropriate. I hope the Minister will reconsider the scope criteria.

In summary, I do not have time to add to the comments on defective materials and the laudable “polluter pays” principle, which I support. It is excellent to note that leaseholders are indeed to be protected. The more effective regulatory framework for testing and approving building products is overdue. Nor do I have time to discuss offences set out under the Bill, but I think penalties should be high. I look forward to the forthcoming government amendments, and I hope protection for leaseholders will run robustly as a central tenet throughout.

Leaseholders: Safety Remediation Costs

Lord Thurlow Excerpts

Thursday 4th November 2021 Lords Chamber

[Lord Thurlow (CB)]

I add my voice to the thanks to the noble Lord, Lord Stunell, for tabling this debate. I want to make the House aware of my interests in the register. I have been involved in the property market for 40 years, and a member of the RICS for most of that time. I own two buy-to-let flats in London but, mercifully, I do not believe that either is affected by the cladding problems. In my comments, I wish to address the first of this debate’s two sections: the situation of leaseholders affected by the need for remedial work.

First, I repeat that the £5 billion made available by the Government is not enough and inadequate. It is not nearly enough for remediation. The noble Lord, Lord Young, and others have mentioned this. The impact on residents’ lives applies equally to those in the 11 to 18 metre-high buildings—the noble Lord, Lord Stunell, mentioned this in his introductory remarks—and, indeed, those in the four-storey buildings below 11 metres. There are some tragic stories and huge costs there, too. There is help from government in other ways, but the costs are enough to bankrupt thousands of the home owners we have just heard about.

This will not go away. The long-term political fallout from it is likely to be severe. It is nothing to do with which party is in power. There is simply widespread outrage, nationwide, that the Government have failed to provide remedy. This is of course unreasonable but it reflects a wider and deeper difficulty: the entitled society. We should be extremely proud—indeed, we are —that we provide a roof over everyone’s head, free education and healthcare, a minimum wage and unemployment benefit, but removing personal responsibility, which is a risk, can have corrosive side-effects. This nanny state is creating an entitled population, looking to apportion blame at the feet of government for any misfortune. I do not propose to abandon the welfare state, but perhaps some reflection is worth while to restore personal responsibility and some common sense.

I fear that this cladding misfortune will rest with government, rather than the fault lying with the manufacturers of the faulty materials or those responsible for faulty construction or supervision. The Government are expected to step up. I believe the right way forward is for the Government to establish the structures to enable the compensation system to work in protecting individuals from huge costs. They should not write the cheques themselves unless their own supervisory systems have failed the taxpayer.

Manufacturers of faulty materials are generally large corporations. Individuals cannot afford to sue them. Companies and their insurers spend millions of pounds every year in legal fees protecting shareholder returns. It is their job. The Government should create a structure that gives leaseholders a voice and recourse to law, without ruinous financial consequences.

There is an escape route for government. We have heard it several times already: the “polluter pays” principle. The French manufacturer Saint-Gobain, a huge PLC, sells its dangerous cladding in the UK through its subsidiaries. Even after withdrawing it from sale in France, having discovered that it was unsafe, it went on selling it here. Where is the moral compass in that? It should have been sued, yet curiously the Government have not done this. It should have funded a large part of the compensation, reducing the taxpayer burden. With this in mind, the increase from six to 15 years in the statute of limitations period proposed for claims in the Building Safety Bill is an excellent start—but the problems stemming from faulty materials will not go away. Manufacturers must be held responsible, not taxpayers.

Finally, will the Minister please explain why the Government do not appear to be bringing legal action against the manufacturers of faulty, combustible materials used at Grenfell and other developments—cladding that has to be removed at great expense? It was in use throughout the country. Instead, Her Majesty’s Government are spending hundreds of millions of pounds of taxpayers’ money, and the taxpayers’ bill is bound to keep rising. The Government are the only entity capable of taking on the funded firepower of legal action against multinational corporations. I believe this is where taxpayers’ money should be spent—not on financial remedies, which are the province of corporations and their insurers.