My Lords, since it seems de rigueur to start with a quote, I suggest we start with Jean-Baptiste Alphonse Karr:
“Plus ça change, plus c’est la même chose”—
the more things change, the more they remain the same. However, we simply cannot have that quote for this Bill; we do not want things to remain the same. That is why I prefer the quote from Heraclitus the Obscure of Ephesus: “panta rhei, ouden menei”—all things change, nothing remains. That, I suggest to my noble friend, should be the strapline of this Bill, if he cannot put it into the Long Title.
As my noble friend Lord Young of Cookham said, this group contains probably the most important amendments in the whole Bill, along with government Amendment 114 on the cost schedule. That is why we will probably spend more time on it than any other. We have four major groups of amendments here, and we are all seeking to do the same thing. We have the Government’s amendments, my noble friend Lord Young’s amendments, those of the noble Earl, Lord Lytton, and mine. I am sorry that I have about half the amendments in this group. The sets from us Back-Benchers are all complementary. We are all in the same boat; we may have slightly different strokes, but we are all rowing in the same direction as we seek to toughen up the Government’s position, which is a very good start.
First, my noble friend the Minister said on Monday—when I was unable to be present—that he found my speeches priceless. I take exception to that. He is wrong; they are not priceless. If the Government accept my amendments, they will have a huge cost attached, starting at £15 billion. Every penny will be
paid by the builders and developers, and that sum is just the excessive profits they have made in the last few years. They are not priceless—there is a good cost attached.
I am very pleased to be able to support my noble friend Lord Young of Cookham’s amendment and the excellent way he has introduced it today. I will not repeat his arguments, since I cannot improve on a single word of them. I also commend Amendment 115, in the name of the noble Earl, Lord Lytton. He is also an expert in these matters, as we heard just now. I particularly like his introduction to the amendment:
“The purpose of the FHRS must be to ensure that residential blocks of flats with fire hazards are made safe … speedily, efficiently, effectively and proportionately … without recourse to lengthy and expensive legal proceedings … without cost to leaseholders or occupiers, and … in accordance with the perpetrator pays principle.”
He replicates those principles in Amendment 118, which I am also pleased to support.
Now that your Lordships have heard from the experts, this enthusiastic amateur will attempt to explain his amendments in this group. Like my noble friend Lord Young of Cookham, I agree that my noble friend and the Minister, Michael Gove, have transformed the landscape of fire remediation works, and the government amendments to this Bill go a very long way to delivering on the pledge that no leaseholder will pay a penny and that the perpetrators will pay. But as my noble friend Lord Young of Cookham pointed out, not all relevant buildings are covered, not all leaseholders are covered and not all defects are covered. The object of my amendments—and of others—is to deliver the policy, fill in the gaps and make the protection more robust.
Two weeks ago, a noble Lord following a speech I made in the main Chamber said that I had, in my usual way, set out an absolutist position, but that I was nevertheless right to raise the issue, et cetera. So, like the noble Earl, Lord Lytton, I have attempted in my Amendment 148 to set out some key building safety objectives to which the Secretary of State and everyone else exercising functions under the Bill must have regard to when making regulations.
I do not like these EU or UN regulations which begin with dozens of meaningless “whereas this” and “whereas that”, et cetera, and our Office of the Parliamentary Counsel does not like declaratory objectives which do not actually make substantive law. Nevertheless, when I was chair of the Delegated Powers Committee, I and my committee heavily commended my noble friend’s boss, Michael Gove, on the Fisheries Act—which has now passed—because it began with a series of objectives, which we had never really had before in legislation. We said that it was a wonderful way to start the Act, and that got universal approval from all the countries of the union. My noble friend should go back to his boss and say that, if it was good enough for the committee and I to commend him then on setting objectives at the start of the Bill, he should adopt either the Lytton principles or the Blencathra objectives and put them at the start of this Bill, setting the scene for what we want to do in future. I invite colleagues to look at my Amendment 148, and I promise then that I will not read it out to them. I will read out my other amendments, however.
The concept behind my Amendment 34 is very important since it relates to Clause 57, one of the most important clauses in the Bill. But the clause has a weakness, in my view, in that it gives the Secretary of State various regulation-making powers to create a levy or levies but does not set a maximum limit on what the levy might be. From my experience in the Delegated Powers Committee and the legal advice we received, any general levy-making power in regulations is highly vulnerable to judicial review and challenge unless the Secretary of State is operating within maxima parameters. It does not matter what those maxima are so long as they are in the primary Act. That means that any levies set by the Secretary of State under that maximum cannot be challenged on the grounds that they are unreasonably high.
The big building companies have already promised— I think I read this in an article last week—to challenge Gove and throw millions at lawyers to sabotage the whole levy system and claim that regulations setting the fees are ultra vires. The levels I have set out in my amendment may seem excessive; I doubt that the Secretary of State would ever need to set a levy at that rate, but it legitimises any levy he sets under that maximum parameter.
My Amendment 39 simply states that
“‘person’ includes bodies corporate including a holding company or special purpose vehicle”.
In reading the Bill and the government amendments, I think that where the Government have used “person”, it includes bodies corporate, so I will not labour that point. I would just like an assurance that in every circumstance where the Bill talks about the obligations on a person or a levy on a person, it would include bodies corporate.
My Amendment 78 seeks to insert a new clause into the Bill setting out what I call the “Fire hazard remediation objectives”. As I said about my Amendment 148, these objectives may not be perfect, but I am adamant that the general concept of them is.
This very important Bill started as a bit of a dog’s breakfast, amending various Acts and introducing the idea of a regulator—not a coherent Bill in itself but one that amends this, that and the other. However, since the Bill left the Commons, the Government have rightly—I approve of it—hijacked their own Bill by introducing all these amendments, which give the Bill a whole new importance. But they are scattered around it, and there is no coherence. That is why I repeat my Second Reading plea that the Bill team and the Office of the Parliamentary Counsel reorder this Bill for Report and put all the new clauses relating to leaseholder protection measures and perpetrator pay measures into two new parts at the front of it. It would not just be window-dressing; it would make a statement to all the companies involved in building construction that we, the Government and this Parliament, are taking very seriously all aspects of making the perpetrators pay and protecting leaseholders. I suggest that it would also make the Bill a dashed sight easier to read.
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This is where my second list of objectives comes in. We should kick off with clauses on fire remediation work, followed by the government clauses, as toughened
up by the amendments from my noble friend Lord Young of Cookham and the noble Earl, Lord Lytton—and possibly even some of mine.
In Amendment 78, I set out the objectives. I listed 11 of them. On the perpetrator pays objective, it says:
“The perpetrator pays objective means that those who have built as the main contractor or a sub-contractor or supplied materials for the construction of any building which is now assessed as being not fit … for purpose because of a fire or other risk should be responsible for all aspects of the remedial works.”
The strict liability objective means
“that responsibility for serious defects in the original construction or refurbishment of buildings should rest with those who designed, specified, constructed, or supervised the works or made false claims for construction products and they should be liable without any requirement for an individual assessment of their relative culpability.”
The joint and several liability objective means
“that all and any companies or businesses involved in the flawed construction should each be liable for the full costs of remediation works and it should then be up to each company to seek redress from their co-constructors, contractors or suppliers.”
That is a terribly important concept, as we do not want individual leaseholders to have to go after individual companies who will say, “It wasn’t me, guv, it was the other one—it was the subcontractor, the electrician, the plumber.” They should be able to go after any single company or organisation, whether it is the architects or anyone else, to recover the full money, then leave the other companies to fight it out among themselves. That is joint and several liability.
The holding company pays objective means
“that any company which set up a subsidiary or special purpose vehicle in order to construct buildings should be liable for remedial works even if that subsidiary or special purpose vehicle has been wound up and irrespective of whether the holding corporation or special purpose vehicle is based in the United Kingdom or not.”
The subcontractor pays objective means
“that a subcontractor should not be able to escape liability”,
as referenced by my joint and several liability proposal,
“merely because that company was not the main developer, and the construction contract was not in its name.”
The taxpayer as interim remedial works funder objective —horrible terminology—means
“that in order to get remedial works underway as quickly as possible the government should, where desirable, provide funding for those works and recover it from those who are liable for the remediation later.”
The taxpayer as last resort objective means
“that when it has not been possible to find or collect payments from construction companies, their sub-contractors and suppliers, and if there is no other source of funding, the government should be responsible for the remediation costs.”
The no retention objective means
“that in situations where remediation is involved main contractors should not be able to hold back payments to their subcontractors or suppliers until such time as those subcontractors or suppliers undertake more work for the principal contractor.”
The mandatory information objective means
“that if any freeholder, landlord, or managing agent of a property conducts any safety study whether fire or otherwise on the whole or any part of the property then it should be a requirement that that study is shared with all those with an interest in the property including leaseholders.”
The managing agent cost control objective means
“that those who manage properties on behalf of freeholders or landlords should be prohibited from charging excessive fees for undertaking fire safety studies or applying for fire remedial work funding.”
The final objective, the regulator assistance to lease- holders objective, means
“that the regulator should, where desirable, take up cases on behalf of leaseholders either individually or collectively who are in dispute with freeholders and landlords over the nature, extent and costs of any remedial works.”
These objectives are not perfect—they are technically flawed and so on—but I submit to your Lordships that the concept is the right way to go.
My Amendment 79 creates what I call a fire risk assessment authority. I will not spend any more time on it because there are better alternative suggestions in the amendments other noble Lords have proposed today. However, my Amendment 80 suggests that an appeal board be set up. My format here may not be perfect but the Government need to create such a board because, otherwise, every decision of a panel or body of wise men and women stating that a building or parts of it are a fire risk will be challenged in court, and long delays will ensue. It is our experience that where there is an appeal body, one can head off judicial review, and that is better than the arbitration proposed by my noble friend Lord Young, if I may say so, or the complex procedures in the Bill. A separate independent appeal body can cut off judicial review.
I apologise to noble Lords since I have plagiarised or simply copied some of their drafting in Amendments 81 and 82 in this group. I had drafted the new clauses on a fire risk assessment authority but when I saw a draft of some ideas on what should be in notices of failure to comply, I thought “I cannot improve on that so I will just pinch it”. Where I have differed is to include a wider group of people and corporations that may be liable, such as: the principal developer, contractor or constructor—we all agree with that; any subsidiary or special purpose vehicle created by the person or company, even if it has been dissolved; and any architects or designers, because it is a major flaw that they are not included. They are the ones who designed the things and said, “Use Joe Bloggs’s faulty cladding”. They should be equally responsible and liable, and they have deep pockets. I also include any other subcontractors involved and the suppliers of materials.
I also stress joint and several liability so that every person or company on that list is liable for the full cost of remediation works. That is very important. The leaseholders only need to get money from one of them and they can then fight it out among themselves. My amendment also states that, in addition to external walls, the fire risks for which the companies are liable should also include such things as: internal walls and the materials inside any walls; fire doors; balconies; lack of sprinklers, fire detection and control systems; and inadequate escape routes. Again, the Secretary of State would have the option to make regulations on these matters; he is not compelled to do so but it is better to have the provision there in any case.
I do not want my noble friend the Minister to say, “Oh, we can’t do that”. Most of my amendments use the formula “regulations made”. The Secretary of
State may, if he is so minded and if circumstances permit, do these things in the future. Wearing my former hat as chair of the Delegated Powers Committee, I would totally condemn all these excessive “regulations made” provisions. There have been many times when we have heard the Government say, “The Minister is not going to use these powers but we are taking them just in case”. I suggest to my noble friend that he can take these powers just in case.
Getting industry to pay will be a challenge and take time. That is why my Amendment 83 creates a system of interim relief whereby the Government would advance the money needed for remedial work and then recover it all from the contractors, developers and those that I have already listed. If the Government do not like that, they will dislike Amendment 84 even more, since it says that if the Government cannot find a single person to pay, then the taxpayer will be the payer of last resort. That will happen in any case. It has to, but I hope that, if we can get the money from the developers and the guilty people—the perpetrators—the burden on the taxpayer will be lessened.
Finally, noble Lords will be relieved to know, I wish to comment on my noble friend Lord Young of Cookham’s Amendment 130, which I have also signed. I particularly commend it because he has inserted figures for the maximum amount of levy that companies will be able to pay, such as 15% of their turnover, 50% of their pre-tax profits or 80% of their dividends. When companies have been paying their shareholders hundreds of millions of pounds in dividends, taking an 80% slice out of their dividends first, to remedy their construction failures, should concentrate minds rather wonderfully. I really like Amendment 130 because it has put those sanctions in there. It is not the Government suddenly inventing a concept that will be challenged in judicial review. If the maximum payments are in the Bill, it stands a good chance of weathering any legal challenge.
I am sorry that I have taken so long on so many amendments, but this group is the most important to the Bill. Of course, many of the amendments are technically flawed, but we are trying to draw attention to the gaps in the Government’s amendments and suggesting different, competitive solutions, but we are all rowing in the same direction. I urge the Minister to acknowledge honestly that there are gaps in his legislation and that the amendments proposed by noble Lords today, or parts of them, will allow us to plug those gaps.
I will probably not retable my amendments at Report but, if my noble friend does not bring in government amendments to fill those gaps, I hope that all noble Lords here today can agree some joint amendments which cover the lacunae identified today. I suggest to my noble friend that that will get universal support in the House, and I suspect that even the Commons, with the Government’s theoretical majority, will agree and vote for our amendments, even if the Government do not like it. I commend my amendments to the Committee.