Fire Safety Remediation: Leaseholders

Christopher Pincher Excerpts

Monday 1st March 2021 Commons Chamber

[The Minister for Housing (Christopher Pincher)]

May I, last if not least, wish you, Mr Deputy Speaker, and all other Members of the House a very happy St David’s Day? I am grateful to the hon. Member for Portsmouth South (Stephen Morgan) for bringing this important topic to the House and to the hon. Member for Reading East (Matt Rodda) for the eloquent and passionate way in which he spoke on behalf of his constituents. I should like to thank other Members of the House who are not here this evening, such as my hon. Friends the Members for Kensington (Felicity Buchan) and for Ipswich (Tom Hunt), both of whom have spoken up, championing their constituents—something that all Members of Parliament do and should do on this issue.

Building safety is a matter of great significance to residents, not just in the Portsmouth South constituency but across the country. The Government’s aim has always been to protect residents in high-rise blocks of flats without imposing burdensome costs on leaseholders. As Members are aware, last month the Government announced a clear five-point plan that will remove unsafe cladding, provide certainty for leaseholders, and ensure that industry takes the responsibility that it should for its past mistakes. Crucially, our plan also brings us one step closer to creating a world-class building safety regime. Integral to its success is finishing the job of removing unsafe cladding.

As I have a little bit of time, perhaps it would be helpful for me to set out some context and remind the House of where we have come from. Following the terrible tragedy of the Grenfell fire, the expert advice that the Government received identified aluminium composite cladding—the type found on the tower—as posing the most severe safety risk on high-rise residential buildings. That is why the Government committed £600 million to accelerate the removal and replacement of unsafe ACM cladding on high-rise residential buildings, and that work is now nearing completion. Almost 95% of all high-rise buildings identified at the beginning of last year with ACM cladding have now been remediated or have workers on site and works under way.

However, we recognised then and we recognise now that other forms of unsafe cladding, while less dangerous than ACM, should never have been allowed to be used in the construction of high-rise buildings and will need to be remediated too. As the hon. Member for Portsmouth South pointed out, although many building owners have acted to make these buildings safe—Barratt is one example of a developer that has done so; there are many others—some owners and developers have not. Put simply, too many building owners and managing agents in the private sector have been slow in getting remediation work started.

That is why we introduced the £1 billion building safety fund, to remediate high-rise residential buildings with unsafe non-ACM cladding as soon as possible and to shield leaseholders from the costs associated with those works. Additionally, as the House knows, last month, my right hon. Friend the Secretary of State announced £3.5 billion in additional funding for the removal and replacement of unsafe cladding on high-rise residential buildings over 18 metres, or approximately six storeys, in England. We have always been clear, though, that public funding does not absolve the industry from taking responsibility for its own failures. In many cases, we have seen developers and building owners rightly correcting the defects they have created. Indeed, they have done so in more than half the high-rise private sector buildings with unsafe ACM cladding.

The position of the Government remains, as hon. Members would expect, that developers, investors and building owners who have the means to pay should do so. They should do the right thing and cover the costs of remediation of other unsafe cladding without passing on the costs to leaseholders However, in many moving cases—the hon. Member for Portsmouth South mentioned a number—it is clear that building owners or their management agents have passed on significant remediation costs to leaseholders without any regard to the affordability of those measures.

The Secretary of State knows, as does Lord Greenhalgh, who leads on this area for the Government, that residents are extremely worried by the situations in which they find themselves. They are worried that the safety of their home is in jeopardy, and their life savings with it. Lord Greenhalgh has had many meetings with cladding campaigners. Indeed, he only recently spoke to the all-party parliamentary group on fire safety and leasehold and commonhold reform. He and the Government are absolutely clear that this distressing situation is completely unacceptable, and we are bringing it to a swift end by ensuring that leaseholders are no longer hit with such bills.

Under our risk-based approach, as identified by the report of Dame Judith Hackitt, the Government funding will focus on high-rise buildings, which is where the independent advisory panel has been clear that the highest risk lies. It is long-standing expert independent advice that height is a central factor in assessing risk. The National Fire Chiefs Council says so, the Building Research Establishment says so, and the independent panel says so. Taller buildings house more people, and when combined with combustible cladding, they are the least likely to be safely evacuated. This means that the overall risk from fire is greater than in lower-rise buildings—sometimes four times greater. That is why we are ensuring that these buildings are remediated, and we have provided grants to get this done quickly. It is right that the Government should prioritise action on high-rise buildings.

For buildings between 11 metres and 18 metres, the risk profile is different, as has been mentioned by the hon. Members for Portsmouth South and for Reading East. Those buildings will not always require the same level of remediation when risks are identified. Although those buildings do not carry the same inherent risk as buildings over 18 metres, we want to ensure that their residents are also given peace of mind and financial certainty. That is why we have said that leaseholders in buildings between 11 and 18 metres will be able to access a generous long-term low-interest Government-backed finance scheme for the removal of dangerous cladding. That finance scheme will not affect their credit rating. It will not follow them round for life. If they sell their property, it will remain with the property. It will not be, as it were, an addition to their mortgage. It will effectively be a safety charge on the building.

As part of the financing scheme, leaseholder payments towards such remediation costs will be capped at a maximum of £50 a month for work that could potentially run into tens of thousands of pounds. We think that this is a fair solution that will provide the support that leaseholders expect, restore confidence in the risk and lending sectors and restore proportionate risk and value assessments so that value can be properly re-ascribed to these properties, while not unfairly burdening taxpayers, many of whom are not homeowners themselves. They are also the covid nurses doing a double shift in the hospital and the shelf stackers in the Tesco Metro in Reading or Portsmouth. We have to be conscious that it is taxpayers’ money that we are disbursing, and we must be careful and sensible with it.

As the Secretary of State laid out in his statement to the House, the Government will ensure that the largest property owners also make a fair contribution to this remediation programme. A developer levy will be introduced and targeted at developers seeking permission to develop certain high-rise buildings in England. Industry must take collective responsibility for the historical building safety defects that it created, and our levy will help to ensure that it does. We will also introduce a new tax for British residential property development to make sure that the largest property developers make a fair contribution towards remediation.

Taken together, these measures will raise at least £2 billion over the next 10 years, fixing unsafe buildings and ensuring that those with the broadest shoulders bear the greatest burden. Our plan unequivocally makes homes safer and frees those who did the right thing, saving for years to get on to the property ladder to enjoy the homes in which they have invested so much. We are continuing to work at pace to make sure that these schemes protect leaseholders, prioritising affordability, transparency and empowerment while accelerating remediation.

The hon. Member for Reading East asked how we would ensure that those on low incomes are protected when they have to pay up to £50 a month. We are alive to the challenges that some people may face, and that is why, when we publish the mechanism for the financing scheme, we need to strike the right balance between the longevity and affordability of payments.

The hon. Member for Portsmouth South asked some specific questions about the building safety fund, so perhaps I could spend a moment or two advising the House on that. The House will know that we have allocated £1 billion during this financial year for the building safety fund, designed specifically to remediate high-rise buildings of unsafe non-ACM cladding. Almost 900 decisions have now been made and over 500 registered buildings are now proceeding with a full application. So far, nearly £160 million has been allocated for use, but the House will know—I have mentioned it myself at the Dispatch Box, as has my right hon Friend the Secretary of State—that, despite clear requirements of building owners in relation to the building safety fund, all too many were unable to properly complete the application process so that the Government could properly assess the eligibility of those applications. Some 2,820 registrations to the fund were made and over 1,000 did not provide such supporting information, such as the height of the building that was applicable and the template lease agreements that apply. In some cases in Portsmouth, EWS1 forms were submitted suggesting that no remediation was necessary.

We have worked closely with the building owners and their agents to address this challenge. We have extended the timeframe for application to the end of June this year. I am confident that the money will be allocated—the works must begin by September this year—and that this fund, taken together with the £3.5 billion that we have also made available for the remediation of high-rise properties with unsafe cladding, will ensure that the work is done effectively and that those people can live safely and surely in their homes once again. I should say, however, that all registrants should continue to ensure that everything is done in the meantime to maximise the pace of remediation and continue to make progress with their applications to the fund, because we want this work to get on and complete as quickly as possible.

The hon. Gentleman also mentioned the interim measures that we have put in place. I should remind him of one of the reasons why we have introduced the waking watch fund of £30 million to support those high-rise properties that have a waking watch, where costs are being passed on by owners to their leaseholders. We have introduced that fund to make sure that those in the greatest need are supported, but the best way to end waking watches is to get on and remediate those buildings. That is the message that we have impressed time and again on building owners and their agents. I am sure that the hon. Gentleman does exactly the same.

Ultimately, all these measures are designed to ensure that the remediation of unsafe buildings happens as soon as possible while protecting leaseholders from unfair, unaffordable costs. As I have said, we have made good progress on remediation. We have taken enforcement action with the joint inspection team, which we support and fund, helping local authorities and fire and rescue services around the country to undertake a number of important actions in which building owners have been fined or named and shamed. That work has contributed to the pressure that we have exerted, and we are now seeing the results.

We will continue to advance EWS1 applications to the building safety fund to the next stage so that we can finish the remaining remediation works, and we are doing that as quickly as we can. We have appointed specialist consultants further to increase the pace of remediation and get the job done. We have also spent £700,000 on the recruitment of 2,000 fire risk assessors. One hundred are being trained and put into the field every month to ensure that proper fire risk assessments can be made of buildings, to ensure that the proper costs to remediate them can be associated with them and work can begin.

Our plan means that building owners, developers and management agents take responsibility for fixing the problems that they created. The Fire Safety Bill that we introduced will strengthen enforcement action in cases in which they do not do so. We debated that Bill and its remaining provisions last week. The House will know that we could not accept the amendments tabled by my hon. Friends the Members for Southampton, Itchen (Royston Smith) and for Stevenage (Stephen McPartland). Their intent was good, decent and honourable, but the amendments did not provide sufficient regulatory underpinning to the Bill to protect the Government and the taxpayer from potential court action by landlords and freeholders, which would have stopped the progress of the Bill. I hope that the House will understand why the amendments, although well intentioned, were so defective that the Government could not accept them.

We will soon introduce the Building Safety Bill, which makes a once-in-a-generation change to the building safety regime. It will help to place even greater accountability on those responsible for these buildings so that no resident is asked to fix a problem that they did not cause at a price that they cannot afford. We will fulfil our pledge to bring about the lasting change that we need so that confidence in our building safety regime is fully restored.

Many of the challenges that we have spoken about today —the hon. Members for Portsmouth South and for Reading East, and Conservative colleagues speak about them so forcefully—and beyond it have been allowed to build up over decades and by successive Governments. That is why we must tackle those failures once and for all, righting the wrongs of the past while delivering a fairer deal for taxpayers, who have had to foot so much of the bill, and for leaseholders, because they have a right to expect that and they deserve nothing less.

Question put and agreed to.