My hon. Friend makes an important point and I welcome his work in this area over a long period.
The changes in the Bill are not likely to do much to help the residents of Barrier Point who have exercised their right to manage. The FCA has argued that
“the intervention most likely to reduce prices for the minority of multi-occupancy buildings with the most substantial price increases would be cross-industry risk pooling”.
I was pleased to hear from the Secretary of State, in answer to my intervention, that he will be meeting representatives of the Association of British Insurers this week. The ABI initiative on this issue appears, up to now, to have stalled. The FCA recommended that the ABI should work with it and with the Government to introduce a risk pooling scheme in 2022. The scheme was expected to come forward last summer, but we are still waiting. I am hoping that, as a result of the meeting this week that the Secretary of State has told us about, things will get moving.
I checked with the FCA last week about this. It said that the ABI plan is
“credible and capable of delivering savings to those worst affected buildings”,
but it went on to add that the plan is delayed with “no firm launch date” because the ABI is struggling to secure “the reinsurance capacity required”. That seems
to be the obstacle. I very much hope that the Secretary of State can find a way to push this forward at his meeting. The ABI urged the Government to increase capacity by backing catastrophic losses in the scheme. It did that most recently in June. Can the Minister tell us whether that appeal has been considered by the Department and whether that might be taken forward at the meeting with the Secretary of State later this week? When does he think risk pooling will commence?
On remediation, there is a power imbalance between leaseholders and freeholders. That has been highlighted to me by Barrier Point residents. The Bill does not really address that. Section 72 of the Building Safety Act 2022 makes a right-to-manage company the “accountable person” for a high-risk multi-occupancy building, making the directors criminally liable if negligence can be proved. The same Act, however, requires only that freeholders “co-operate” with accountable persons, without any enforcement mechanism in place at all. The freeholder at Barrier Point has held up remediation works for several months and is refusing to sign off on them. The directors of the right-to-manage company desperately want to fulfil their legal obligations but they are left liable because of the refusal of the freeholder to say okay, and there is no comparable liability on the freeholder. That seems wrong, and I wonder whether that imbalance can be addressed in the course of the Bill’s passage through the House.
The Minister said in oral questions just last week that the Government plan to make changes to the Bill as it goes through Parliament, and I hope he will consider how that imbalance can be addressed to ensure that remediation work can go ahead in a case such as that, which I suspect is by no means unique. The residents of Barrier Point want to purchase their freehold. To do so, they need to get at least 50% of all the leaseholders to agree to, and be able to afford, a freehold purchase. That is very difficult in a building with 257 households. I do not think the Bill does anything to make that process easier, so I very much hope that Ministers will be open to further improvements as it progresses through the House.
6.49 pm