Building Safety Bill — House of Lords, 2022-04-26
Topic: Housing
Stephen Greenhalgh (Conservative, Centre-right): My Lords, with the leave of the House, I will also speak to Motions B to H Here we are again: debating this landmark Bill which will bring forward the biggest changes to building safety legislation in our history. I will turn quickly to the outstanding non-government amendments. Noble Lords, led by the dynamic duo, my noble friends Lord Young of Cookham and Lord Blencathra, extended the definition of "relevant building" to buildings of all heights containing two or more dwellings. As the Government have said on many occasions, we must restore proportionality to the system. That is why we cannot agree to extend leaseholder protections to include buildings under 11 metres. As I have said repeatedly, there is no systemic risk of fire for buildings below 11 metres. Such buildings are extremely unlikely to need costly remediation to make them safe. Despite research and lobbying from a number of areas, the department has been made aware of only a handful of low-rise buildings where freeholders have been commissioning such work, and even fewer where that work was actually based on a proper assessment in line with the PAS 9980 principles. My right honourable friend the Minister for Housing was clear that leaseholders in buildings below 11 metres should write to my department should they find that their freeholder or landlord is commissioning costly remediation works. I have already intervened directly with building owners and landlords to challenge freeholders, such as in Mill Court, and will continue to do so. Your Lordships can be assured that I will bring my full weight to bear where landlords are looking to carry out works that are not needed or justified. However, given the very small number of buildings involved, it is not appropriate to take forward a blanket legislative intervention and bring hundreds of thousands more buildings into scope. I must point out to noble Lords that doing this could backfire, sending mixed signals and encouraging the market to take an overly risk-averse approach to this class of buildings Turning to leaseholder-owned—or collectively enfranchised and commonhold—buildings, the Government’s original proposals included an exemption from the leaseholder protection provisions for leaseholder-owned buildings: those in which the leaseholders have collectively enfranchised, and those which are on commonhold land. Noble Lords agreed an amendment in the names of my noble friends Lord Young and Lord Blencathra—the dynamic duo again—and the noble Earl, Lord Lytton, to remove that exemption Those noble Lords will know that I have a great deal of sympathy with their position. I know that the amendment is well-intentioned and driven by a desire to protect these leaseholders, and the Government share those aims. However, as I said on Report, these amendments will not have the intended effect of protecting leaseholders living in those buildings. Those leaseholders who have enfranchised would still have to pay, but in their capacity as owners of the freehold rather than as leaseholders. Worse, where some leaseholders have enfranchised and others have not, the enfranchised leaseholders would have to pay for remediation of the whole building in their capacity as owners of the freehold, including the share of remediation costs that would otherwise have been recoverable from those leaseholders who have not enfranchised, once they have paid up to the cap. This would create the perverse situation where the leaseholder protections result in an increase in liability for those leaseholders who have chosen to collectively enfranchise. That is why the other place agreed to reinstate the exemption for leaseholder-owned buildings. My right honourable friend the Minister for Housing announced last Wednesday that the Government would consult on how best leaseholders in collectively enfranchised and commonhold buildings can be protected from the costs associated with historical building safety defects to the extent as all leaseholders Turning finally to the qualifying leaseholder contribution caps, the Government proposed that lease- holders’ contributions should be capped at £10,000, or £15,000 in Greater London. We believe that this approach protects leaseholders, while ensuring that work to remediate buildings can get under way. Noble Lords agreed with the amendment of the noble Baroness, Lady Hayman, to reduce that cap on contributions to zero I will not repeat all of the Government’s arguments here, but I want to remind Peers of just how far the Government have come. Leaseholders are fully protected from costs associated with the removal of unsafe cladding. On non-cladding defects, where a developer has signed up to our developer pledge—that is more than 35 developers—they will fix non-cladding defects, as well as cladding defects, in their own buildings, and these leaseholders will pay nothing. If a building owner is, or is linked to, the developer, that building owner will be liable for the costs associated with non-cladding defects, and their leaseholders will pay nothing. If the building owner or landlord is not linked to the developer but has the wealth to meet the non-cladding costs in full, their leaseholders will pay nothing. If a leasehold property is valued at less than £175,000, or £325,000 in London, the leaseholder will pay nothing, and, if the leaseholder has already contributed up to the cap, they will pay nothing. Based on this approach, the Government’s assessment is that the vast majority of leaseholders will pay less than the caps, and many will pay nothing at all In relation to safety checks, noble Lords agreed to an amendment that requires the new building safety regulator to look at a number of important safety matters. We have consulted with the HSE and are happy to confirm that we fully accept the principle of this amendment, and the building safety regulator will be happy to take forward these safety reviews. I thank the noble Lord, Lord Stunell, for his passionate advocacy in this area. The Government therefore proposed an alternate version of this proposal, which was agreed in the other place. I hope noble Lords will agree that this provides clearer drafting and a more practical and pragmatic approach. Importantly, we have increased the time available to the regulator from two years to three years. This reflects the time needed for the regulator to develop the capacity to carry out these reviews alongside all its other functions. We have also made a number of technical improvements to the Bill, and I am happy to answer questions while summing up.