My Lords, before I get my bearings, it is always good to have a few Latin phrases. “Quis custodiet ipsos custodes?”—well, I am just going to say, “Res ipsa loquitur”.
This is the “PP” group of amendments: “polluter pays” if you are my noble friend Lord Young, or “perpetrator pays” if you are the noble Earl, Lord Lytton. Although I will respond formally at the end— I am now speaking to the government amendments—I honestly agree with the sentiment of working with noble Lords and that a pick-and-mix approach is the right way forward. I am very keen to do that between now and Report. That is not in my speaking notes. The important thing is that we need a practical approach. We need one that works in law and in practice, and of course we want the polluter to pay.
I have taken noble Lords’ amendments and sought external counsel opinion, off my own bat, from a leading QC who deals with these issues in the courts to get their opinion. While I know my noble friend has tremendous ministerial experience, he perhaps has not always been in the courts when these things go into dispute. I know the noble Earl has considerable professional experience, but, again, this has to work in law as well as in practice. As the Committee will all appreciate, any scheme that requires government funding is not just a matter for this department; it is a matter for the Government and, in particular, needs Treasury approval.
I have always accepted that, in order for the polluter to pay, we have to have something that establishes liability at the building level. It is not an either/or.
That is not to say that the Government’s approach is wrong; I think the Government’s approach is right. We have to have a waterfall effect that goes down the list of the polluters but recognises that not all freeholders are equal—some are “more equal than others”, to quote George Orwell—and that perhaps assignment of liability can be varied in regulation to reflect that. But all that detail is something that happens at later stages of the Bill, as my noble friend will know. Perhaps we will tease out some of those points in due course.
Clearly, if you are a developer like Ballymore that retains its freeholds, it is very easy. But if you are a developer like Berkeley, which often sells off its freeholds to a freehold investor, it becomes slightly more complex. But the intention of the Government is certainly not to let the Berkeley Group off the hook because it took another £20 million or £30 million by selling its freeholds off to another group to manage. It is still in the frame for the buildings that it built. I mention those developers just as examples, because we are obviously talking about a crisis that affects all the major housebuilders, as they freely acknowledge—not just the large ones but the medium and small ones, which have all contributed to a crisis that has brewed up over decades.
Let us move to the government amendments. Following my 11 January repeat of a Statement to this House, we have been clear on our expectations that developers should commit to self-remediate all unsafe high and medium-rise buildings for which they are responsible. They should agree contributions to fund the remediation of all cladding on buildings of 11 to 18 metres. The department has been in discussions with industry leaders on this matter and is making good progress towards a solution. I have had discussions with the medium-rise developers and have been alongside the Secretary of State in all those substantive discussions. However, should we need to take action against those unwilling to make these commitments, amendments tabled in my name will make it possible to impose a solution in law and make sure that developers and manufacturers take responsibility for rectifying building safety defects. I will now outline these important government amendments.
The first measure we are proposing as part of our package to ensure that the burden of paying for fixing historical building safety defects does not fall on leaseholders or taxpayers is a group of amendments to the building safety levy. They are an important part of the solution as they allow the building safety levy to be imposed in relation to building work going through the building control process on all residential buildings, not just buildings over 18 metres or seven storeys. This will enable the Government to raise funds to remediate cladding should the industry fail to step up and pay for the problems it has caused. It is our intention to set out in secondary legislation the levy rates and the details of who the levy applies to. By then negotiations with industry should have been concluded.
I now turn back to the package of government amendments and outline the further amendments that we are proposing to ensure that developers and manufacturers take responsibility for rectifying building safety defects. This package of amendments addresses
many of the concerns highlighted today. They introduce measures to allow us to distinguish between companies that commit to shouldering their share of the blame and those companies that do not. The measures will incentivise industry actors to take responsibility in resolving issues with unsafe buildings, through firms committing to remediate buildings with which they are associated, and to contribute towards the funding of remediation of other unsafe buildings.
The first two amendments in this package would give the Secretary of State a power to establish a scheme or schemes for the building industry. This would act as a means of identifying which industry actors, including developers, and cladding and insulation manufacturers, have done the right thing and committed to act responsibly. Regulations will set out which persons in the building industry may be members of the scheme. In the first instance, the Government are minded to focus this measure on major developers of residential buildings and manufacturers of cladding and insulation. We are keeping this under review as talks with industry continue. Industry actors will be considered “responsible” if they meet published membership criteria for a scheme for which they are eligible. The membership criteria for a scheme will be set out and will include a commitment to rectifying building safety defects. The distinction between responsible actors and actors who have failed to do the right thing will be taken into account by the Government and regulators in their interactions with firms that are eligible for inclusion in a scheme.
The third amendment would give the Secretary of State a power to block developers that have failed to act responsibly from carrying out development for which planning permission has been granted, and to make sure that any breach of this block would be subject to enforcement action. The amendment would also allow the Secretary of State through regulations to require a developer to serve a notification of proposed development commencement and to prevent the grant of certification of lawful development for affected developers, should they seek it.
The fourth amendment would give the Secretary of State the power to prevent developers that have not committed to act responsibly, as set out in regulations, obtaining building control sign-off on their developments. This will make selling developments difficult for these developers, as building control approval is in most cases a prerequisite to occupancy and sale. The building control prohibitions will be imposed by regulations that will also set out details such as prescribed documents.
These new measures will help to make sure that while responsible industry actors can go about their business freely and with confidence, others will face significant legal, commercial and reputational consequences. They align with two of the principles set out by the Secretary of State: that the industry must pay for remediation and that the burden should not fall on leaseholders or the taxpayers. These measures will ensure that the burden is shared among the relevant industry actors while protecting leaseholders and the taxpayer. We cannot continue to allow those who are unwilling to commit to resolve the building safety crisis to have a role in building homes of the future.
These amendments are being tabled to ensure that we have the legislative provision to help us to do this. I beg to move.
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