Building Safety Bill

Lord Young of Cookham Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, like others, I welcome the introduction of this Bill, which will help restore confidence in homes built by the UK construction industry after the damaging revelations of recent months. If the Government’s ambitions for home ownership are to be achieved, buyers must have confidence in the homes they are buying and so must lenders.

I join others in wishing a long and happy retirement to the right reverend Prelate the Bishop of Winchester who, when I was a Member of Parliament for Hampshire, had responsibility for my spiritual health.

I want to refer to the helpful covering letter that my noble friend the Minister wrote to us on 20 January, entitled “Introduction of the Building Safety Bill” and, in particular, to the section headed “Protecting Leaseholders from Unnecessary Costs”; I do so alongside the Statement on building safety made in the other place by the Secretary of State on 10 January. My noble friend’s letter says:

“The Secretary of State recently announced that leaseholders living in their homes should be protected from the costs of remediating historic building safety defects.”


Amen to that, but none of the subsequent paragraphs in the letter, or indeed anything in the Bill at the moment, gives a guarantee that this will be done, nor do they explain how it will be done. Hence the need for further amendments, to which I will return in a moment.

The next paragraph of the letter covers one of the building safety defects—namely, cladding—but not others. It makes it clear that the costs are to be met by a scheme funded by industry, alongside a further push to make sure that developers fix the unsafe buildings they built. Again, amen to that, but it follows that unless and until industry pays, the work will not be done, and the last thing leaseholders want is more delay.

The initiative to get the industry to contribute voluntarily is commendable but the volunteers are not going to pay for other peoples’ buildings; their shareholders would complain if they did. We know that many of the offending companies either cannot pay or will not pay. At the moment, leaseholders have no bankable guarantee that their buildings will be fixed with someone else paying. I welcome all the recent initiatives to help leaseholders and applaud the work of my noble friend the Minister for his tireless campaign behind the scenes but, as he recognised in his opening remarks, we are not there yet.

Now we have to turn to the Statement I referred to earlier, which clearly stated:

“We will take action to end the scandal and protect leaseholders.”


The Secretary of State went on to say:

“We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders.”


The Statement concluded:

“I can confirm to the House today that if they do not, we will impose a solution on them, if necessary, in law.”


When pressed by an Opposition MP, the Secretary of State said in reply:

“She specifically requested that we provide amendments to the Building Safety Bill to ensure that there is statutory protection for leaseholders. That is our intention—we intend to bring forward those amendments—and I look forward to working with her and colleagues across the House to provide the most robust legal protection.”


So the Secretary of State must have some idea of the sorts of amendments that he plans to bring forward.

Later, he clarified what he meant by statutory protection:

“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; cols. 285-91.]


Note that that commitment extends to all building work, not just cladding. Again, this is all very good news, and I commend the work of my noble friend for pressing for those commitments. However, it raises some questions—I appreciate that my noble friend may not have all the answers, but he may be able to reply in general terms.

First, many leaseholders are currently threatened with repossession, eviction and bankruptcy because at the moment they are currently legally liable for the bills, which the Secretary of State has recognised are in no way their fault. They have been promised statutory protection—but statutory protection from what, and from when? Are buy-to-let landlords included, and what about private leaseholders in blocks owned by social landlords?

Does this protection cover all the work done for which they have been invoiced but not paid; does it cover invoices only from the date of the Statement? Does it become operative only when the necessary legislation is passed? Does it cover only cladding or—as one of the quotes I just referred to implies—all safety work? Should it be retrospective, as the noble Baroness, Lady Hayman, suggested in her opening remarks? Leaseholders need clarity on these issues, and they need it now.

Then, if both the statutory protection and the legislation to oblige industry to pay are to be included in this legislation—again, as the Secretary of State implied—that is a high legislative hurdle in a very short timescale. What progress has been made in drafting the necessary clauses? They are bound to be controversial if they are to be effective, and the House is allergic to Henry VIII clauses.

I and my noble friend Lord Blencathra—the so-called Awkward Squad; an unusual name for two former Conservative Government Chief Whips—are willing to help tackle the issues that will need resolving. How does one define a delegated powers clause which allows the Government to decide the meaning of “defective construction”, particularly if there has been no breach of building regulations? Will there be an appeals procedure? How do we do this without delaying essential remedial work? Will some sort of credit facility be available until the cash comes in? Will the scheme be proof against ECHR challenge?

How do we enforce against foreign companies domiciled overseas, where they have wound up the offending subsidiaries—and, if we cannot, how will the resulting shortfall be met if no more funds are available from the Treasury?

I hope my noble friend has some of the answers, not just for the sake of concluding our debate this evening but for the sake of leaseholders, who will be hanging on every word of his reply.

Building Safety

Lord Young of Cookham Excerpts

Tuesday 11th January 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I commend the Minister for his tireless work over the past few months, which has led to this very welcome initiative. Will he clarify two points that arose from the exchange in another place yesterday? First, when asked about costs relating to fire doors and external wall insulation, the Secretary of State said that

“the freeholders, as the ultimate owners of these buildings, will be held responsible for all the work that is required, and we will make sure that leaseholders are not on the hook.”

He then confirmed this in a subsequent reply to Matthew Offord, saying:

“It is our intention that the ultimate owner of a building is responsible for all of the safety steps that are required, and we will use statutory means in order to ensure that that happens.”—[Official Report, Commons, 10/1/22; col. 301.]


I read that as saying that leaseholders are protected for all safety steps, not just dealing with cladding. Secondly, while the Secretary of State repeatedly promised statutory protection for leaseholders, it is not clear what they should do about bills sitting on their mantelpiece for work completed or under way but not paid for. Do those leaseholders have statutory protection?

[Lord Greenhalgh (Con)]

My noble friend always asks very pertinent questions and he knows this issue inside out. Rather than obfuscating this, I will give the straight answer. Of course, in protecting the leaseholders, someone else has to pay—that is the thrust of the question from my noble friend. When it comes to cladding, there is now funding in place and a plan to deliver that without touching anyone beyond the polluter, if we can get back the money put up by the taxpayer. Some leaseholders have obviously borne the brunt of the costs as well and that is regrettable. We cannot apply these protections retrospectively but, by having the reset statement issued by my right honourable friend, we can ensure that we protect many thousands—potentially hundreds of thousands—more leaseholders from being affected in the future by having those statutory protections in place.

Building Safety Defects

Lord Young of Cookham Excerpts

Wednesday 5th January 2022 Lords Chamber

[Lord Greenhalgh (Con)]

I know that there is a “broken promises” line, but the reality is that 95% of ACM buildings have been remediated. Actually, we have accelerated at pace while I have been Building Safety Minister, despite the global pandemic. The reality is that for many of these buildings—about 20, and a lot of them happen to be in the London Borough of Southwark—it was literally discovered only months ago that they had ACM cladding. I am not blaming the noble Lord, Lord Kennedy, but we are doing our best. This is tough, and we should not be trying to score points. We are absolutely committed to remediate these buildings, especially those with aluminium composite material, the most deadly form of cladding. Very shortly, we will have that removed from all buildings in this country.

[Lord Young of Cookham (Con)]

My Lords, since we last discussed this matter, on 1 January, thousands of leaseholders will have received service charges from the freeholder demanding very substantial remediation sums—sums which are not affordable for many of these leaseholders—which will lead to either repossession or bankruptcy. While the Government have provided substantial support, which I welcome, does the Minister recognise that this is insufficient to prevent hardship? Will he have urgent discussions with a view to raising more resources, possibly through a levy on those developers and other builders responsible for the defects in the first place?

Smoke-free Pavements

Lord Young of Cookham Excerpts

Wednesday 24th November 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, all previous legislation to reduce the harm done by smoking has been on a national basis, such as the ban on smoking on public transport and the ban on smoking in public places. However, despite representations from the Local Government Association that any ban under this measure should also be on a national basis, the Government declined and left it to local discretion. Will the Government follow up the suggestion by the noble Lord, Lord Faulkner, and, in the light of that, consider giving a clear health warning about the risks of damage from smoking and introduce a total ban on smoking on pavements?

[Lord Greenhalgh (Con)]

I thank my noble friend for making the point about how progress has been made and that it has been on a national basis. However, as someone who spent 20 years in local government— 16 as a councillor and four in City Hall as deputy mayor—I know that sometimes it is right to recognise that we do not have problems equally on a national basis. Smoking rates are higher in the north of England, so let us learn from there first before we take the next step.

Leaseholders: Costs

Lord Young of Cookham Excerpts

Thursday 18th November 2021 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

I call the noble Lord, Lord Young. Apologies.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to my noble friend for what I know he was doing behind the scenes to sort this. Can he confirm that when his Secretary of State was given his new job, he was instructed by the Prime Minister to resolve the cladding crisis? This clearly involves measures beyond those that my noble friend has already referred to. If innocent leaseholders are to avoid financial distress, bankruptcy and eviction, either the Treasury or those responsible for building these defective flats will have to dig deeper into their pockets. Does he agree?

[Lord Greenhalgh (Con)]

My noble friend makes it easy for me: yes, I agree. Implicit in the fact that the Treasury would have supported a subsidised financing scheme is that we need more taxpayer subsidy, but it cannot be the only answer. We need to make sure the polluter pays, and the Secretary of State is looking at every avenue to do that.

Levelling Up White Paper

Lord Young of Cookham Excerpts

Monday 15th November 2021 Lords Chamber

Asked by

[Lord Young of Cookham]

To ask Her Majesty’s Government when they will publish their white paper on levelling up.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

We aim to publish by the end of the year. However, our priority is to have a White Paper which meets the scale of ambition and sets out our transformative agenda to deliver real long-term change across the United Kingdom. Levelling up is at the heart of this Government’s agenda to build back better after the pandemic. The recent spending review showed the significant action we are already taking to empower local leaders, boost living standards, spread opportunity and restore local pride.

[Lord Young of Cookham (Con)]

My Lords, I welcome the Government’s commitment to levelling up and to reducing some of the inequalities in our country. But if levelling up is to be more than a slogan, does it not need clearly stated objectives, transparency in the allocation of resources, and measurements so that we can monitor progress? Is my noble friend able to tick those three boxes?

[Lord Greenhalgh (Con)]

My Lords, in July, the Prime Minister set out that we will have made progress in levelling up when we have begun to raise living standards, spread opportunity, improved our public services and restored people’s sense of pride in their community. The forthcoming White Paper will set out the further detail, so that I hope we will be able to tick my noble friend’s three boxes.

Leaseholders: Safety Remediation Costs

Lord Young of Cookham Excerpts

Thursday 4th November 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I thank the noble Lord, Lord Stunell, for his choice of subject for this debate, which I hope will come up with some helpful suggestions for resolving the crisis facing leaseholders, resolving the current impasse and enabling Michael Gove to respond to the rumoured injunction from the Prime Minister to “sort out the cladding crisis”.

I begin by thanking my noble friend the Minister for his tireless work behind the scenes to get a better deal for leaseholders caught up in the post-Grenfell cladding scandal. The steps the Government have taken so far to help leaseholders, which I welcome, have been in part due to his interventions in the intergovernmental discussions that have taken place. These started with the Treasury taking the view that there was no role for taxpayer funding in finding a solution, so we are making some progress.

My concern is that the combination of government help, freeholder support and voluntary action by developers still leaves a very substantial shortfall and, unless further steps are taken, we are likely to see bankruptcies, repossessions and evictions of people who took every reasonable precaution to protect their interests. As the noble Lord has just said, some 1.5 million householders are potentially caught up in this crisis, which is likely to come to a head next April when the bills fall due and land on leaseholders’ mats.

I agree with the unanimous recommendation of the Select Committee in another place, which it repeated in its report earlier this year:

“It has consistently been this Committee’s position that leaseholders should not have to contribute towards any of the costs for a problem they played no part in creating.”


Indeed, I believe that was also the Government’s initial position, though not the Treasury’s. The Select Committee’s proposal was that there should be a comprehensive building safety fund, fully funded by government and industry, and the Government should establish clear principles regarding how the costs should be split between the two. Total contributions should not be capped. I regret that the Government have not accepted the recommendation and have instead come up with a capped contribution from themselves and an inadequate contribution from industry.

There is a precedent for more generous intervention than the Government have offered so far. I refer to the Housing Defects Act 1984, which I put on the statue book 37 years ago. That provided for a 90% grant towards the cost of repairing the defect of a property, subject to an expenditure limit, or repurchase of the property at 95% of the defect-free value. That legislation covered Airey houses, built after the war, that were discovered to be defective in the 1980s. The background is similar in many ways to the problems confronting today’s leaseholders.

Under that legislation, properties were designated if they were defective by reason of their design or construction and if their value had been reduced substantially because the defects had become generally known. Designation was reserved for serious inherent defects that owners, councils or professional advisers could not have known about on survey, sale or purchase —a close parallel to today’s problems for leaseholders. Compensation was provided by the Government on the terms I have outlined.

So I pose the question: if it was right for the Government—a Conservative Government—to intervene generously then to protect innocent home owners, is there not a case for more generous intervention now? In this case, I am not suggesting the Government should pay 95% and I make no apology for repeating a suggestion I have made on earlier occasions, supported by the right reverend Prelate the Bishop of Durham and my noble friend Lord Blencathra, namely that there should be a retrospective levy on the developers who initially sold the defective flats—the “polluter pays” principle referred to by the noble Lord, Lord Stunell.

Instead, the Government have announced a prospective levy of a 4% tax on profits over £25 million on future residential development, to raise just over £1 billion in five years. There are three problems with that solution. First, it does not produce enough money. We are looking at a shortfall of some £10 billion between the cost of remediation at about £15 billion and the £5 billion now on offer. The levy falls well short. Secondly, the buildings on which the levy is payable will not be defective but built under the new higher building regulations. Thirdly, the levy will not fall exclusively on those who benefited from the sale of defective property. Many future developers who had no part to play at all in the Grenfell tragedy will pay, potentially passing the cost on to future purchasers.

So my suggestion to Michael Gove is that he meets the £10 billion gap with a £5 billion retrospective levy on the developers of the offending flats, most of whom are still around and have substantial reserves, and a further £5 billion from the Treasury, belatedly delivering the recommendation of the Select Committee that costs should not fall on leaseholders. I believe a solution along those lines would enable us to begin to draw a line under this problem and relieve thousands of leaseholders of the nightmares they now suffer from.

Public Services

Lord Young of Cookham Excerpts

Tuesday 26th October 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, it is for every council to decide what level of council tax it needs to set. Obviously, there is a latitude to increase council tax by up to 2% to help support the additional social care costs, but the Government have set out their plan to increase funding to social care, as the noble Baroness knows.

[Lord Young of Cookham (Con)]

My Lords, many of us who remember the days when local authority direct labour organisations had a monopoly on public services such as refuse collection welcomed the decision in the 1980s to open these services to competition—a decision that has not been reversed since. Given all the pressure on local authorities today, is now the right time to encourage them to invest manpower and capital to re-enter this market?

[Lord Greenhalgh (Con)]

I agree with my noble friend. There has been a tremendous success in the competitive tendering of services that has driven down cost and increased value for money for the taxpayer, and also seen an improvement in the delivery of local services. It is not surprising that £64 billion is now paid out by local government to private companies to deliver those services. Although local authorities have the powers to trade and charge, they should think very carefully before they decide to move back to the situation before the introduction of competitive tendering.

Building Safety Defects: Costs

Lord Young of Cookham Excerpts

Monday 18th October 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, we are looking very closely at the “polluter pays” principle and the amendments that have been supplied to us by Steve Day. I have asked my officials to meet on a number of occasions; in fact, I am meeting them this Wednesday. There are, however, some difficulties and hurdles that need to be overcome to make this potentially work. I do not exaggerate; they will be quite challenging to overcome.

[Lord Young of Cookham (Con)]

My Lords, since we discussed this on 16 September, we have a new Secretary of State with instructions from the Prime Minister, so we read, to sort out the cladding crisis. While welcoming the new tax on high-rise development and the substantial support that the Government have already offered, this is not enough to prevent innocent leaseholders facing substantial hardship. Further to the suggestion of the right reverend Prelate, should there not be a substantial levy on the developers who built and sold these unsuitable flats?

[Lord Greenhalgh (Con)]

My Lords, we have a new Secretary of State who is putting his fresh eyes on this. We recognise that the developers that put up these shoddy buildings need to pay. Indeed, we may need to look at other people—the cladding manufacturers may also need to contribute to this—because we want to do whatever it takes to ensure that leaseholders are protected as far as is practicable.

Inequalities of Region and Place

Lord Young of Cookham Excerpts

Thursday 14th October 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I very much welcome this debate, so ably moved by the noble Lord, Lord Liddle. Like him, I look forward to the maiden speech from the noble Viscount, Lord Stansgate. This debate is timely because it comes just before the imminent publication of the White Paper on levelling up. This is in fact the delayed White Paper on devolution, promised for September last year, which has now morphed into a White Paper on levelling up. I very much hope that this rebranding will not diminish the previous commitment to greater local autonomy. Devolution has clear centrifugal overtones: pushing powers out. Levelling up has connotations of a more centralised approach: how else can you make things level?

While we are all pretty clear what devolution means, there is no such clarity about levelling up. Like others in this debate, I have spent many hours on the doorstep listening to voters’ priorities: safer streets, better schools, more houses and shorter waiting lists. Nobody has ever said, “George, please level me up.” This is not to discount it as an objective, but just to say that it means different things to different people.

In the context of this debate, in his levelling-up speech on 15 July, the Prime Minister uttered two sentences which I hope will inspire the levelling-up White Paper. First, he said that

“for many decades, we have relentlessly crushed local leadership”.

The second sentence was:

“Come to us with a plan for strong, accountable leadership and we will give you the tools to change your area for the better”.


This afternoon, we should respond to that challenge and then hold him to those words.

I took further encouragement from the recent appointment of Neil O’Brien to the rebranded Department for Levelling Up. In his speech last Wednesday, which was overshadowed by another speech on the same day, he said:

“Boris Johnson put levelling up at the heart of his conference speech ... But what is it? The objectives of levelling up are clear. To empower local leaders and communities.”


That objective was reinforced by Bridget Rosewell, a member of the National Infrastructure Commission, who commented on a report that it issued last month. She said:

“Levelling up cannot be done from Whitehall. Every English town faces a different set of challenges and opportunities, and local leaders are best placed to develop strategies to address these.”


But we live in a highly centralised country. In a recent report on tax and devolution, the IfG said:

“The UK is an outlier by international standards. In 2014, every other G7 nation collected more taxes at either a local or regional level according to estimates by the Organisation for Economic Co-operation and Development.”


Our figure is about 5%, roughly half that of most other countries.

So, while other countries have national and local government, we have national government and local administration, and it is not working. The helpful Library brief for this debate shows that the UK has the highest regional inequalities of the 27 nations measured. I believe that part of the answer to the question posed by the noble Lord, Lord Liddle, in this debate about regional inequalities is to set regions free from central control and allow them to take greater responsibility for key decisions. Others will talk about devolution of power; I shall talk about devolution of money because, without freedom to raise and spend, and being accountable for those decisions, devolution of power is meaningless.

Let me give two examples of how the system is weighted against raising money locally. The Government have just increased national insurance contributions from 12% to 13.25%—an increase of more than 10%. Local government would not have been able to do that without holding a referendum first. There has been no such inhibition on the Government. Then take national taxation. Government income is buoyant. Without touching tax rates, economic growth and inflation swell the Government’s coffers year by year. Income tax, national insurance, inheritance tax and capital gains tax all rise without the Chancellor lifting a finger or incurring a single hostile headline. The OBR estimates that just freezing personal allowances—so-called “fiscal drag”—will be worth £8 billion a year to the Government by 2025-26.

Local government has no such advantage. The council tax base is fixed at 1990 levels, and if local government wants to raise more money, even to stay still in real terms, it has to raise tax rates, with all the aggravation that that entails. And, unlike income tax, council tax is regressive and the tax base is 30 years out of date. Would the Government raise income tax on the incomes of 1990?

I will irritate my noble friend the Minister once more by suggesting that tax bands should be revalued and that there should be two additional bands. However, my final suggestion is that, when we move from taxing fuel to road pricing, the revenue from road pricing—a buoyant source of revenue—should go to local, not central, government, which would give councils the independence and financial help that they need to deliver the autonomy that we all want to see.