My Lords, this has been a fascinating debate, it really has. I shall start with the noble Lord, Lord Stunell, because he served as Minister from 2010 to 2012 and we are graced by his presence. I think that in the coalition he was succeeded by the noble Lord, Lord Foster, from 2012 to 2014, and then there was a chap called Stephen Williams, who never made it to this place. If the noble Lord talks to his colleague Stephen Williams of the Liberal Democrats, who was in the coalition Government, he will know about Florrie’s Law, because that came into existence in 2014. The protection we are talking about today is based on Florrie’s Law that came into effect in public housing. This is about applying that principle of a liability cap across all types of tenure. In fact, I had a meeting in this place with the noble Lord, Lord Pickles, who introduced that amendment in response to a leaseholder who received an enormous bill which was so great that, through the shame of receiving it, she subsequently died. That is why we came up with the cap, as a coalition Government, through Florrie’s Law, and it is that principle we are looking to apply.
I turn to the noble Baroness, Lady Hayman. My admiration for her has increased, with her detailed grip of policy. She read it out with such aplomb, I have to be honest. I think it is important for me to take the high level and I will respond to her in writing, but I want to give her the outline. She is absolutely right in her assessment; what she read out was absolutely correct and the phrases “cascade” and “waterfall” have been applied to the approach we are taking. The waterfall or cascade is in five parts. We start with the developers. Then we move to the freeholders, via an affordability test, and other interim landlords; that is the second wave of the cascade. The third is freehold and interim landlords seeking redress from third parties that have contributed to pollution. The fourth is leaseholders who pay a capped amount—that is for non-cladding costs, to be clear, and is where Florrie’s Law kicks in. Of course, the fifth is freeholders and interim landlords who pay the remainder. That is the cascade approach, but I will write to the noble Baroness, because it was so eloquently put that I believe her questions of me deserve full and detailed answers.
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My noble friend Lord Young always finishes off every interaction with me by saying, “I’m here to help.” I have to be honest with him: his description of
me in his opening remarks made it sound as though I was some kind of snake oil salesman. I am sure that is not what my noble friend intended. I am not a snake oil salesman. What I say is what I believe. I may be a soap salesman; in fact, that was my first job after university with Procter & Gamble. Like the noble Lord, Lord Shipley, I started off at that great institution, learning the principles of business, and it has stood me in good stead ever since, as indeed it has the noble Lord. Apparently, that was in the 1970s in his case, not the 1960s, as I once implied. However, I have been clear that I am a former soap salesman, not a snake oil salesman. I point that out to my noble friend.
These are important matters. We saw today that there are interests in property law. The interests and concerns of the British Property Federation were outlined by the noble Earl, Lord Lytton, then the concerns of leaseholders were expanded on by the noble Baroness, Lady Pinnock. In drawing up a response with regard to who pays, we need to take all those matters into consideration. I will respond to some specific points that were raised.
My noble friend Lord Young asked the very important question of whether enfranchised properties will have to pay all the costs for remediation. I want to be absolutely clear—read my lips—no, they are not. This will not apply to buildings which have exercised a right to collective enfranchisement, or to commonhold land, which in this case, admittedly, is very few buildings. New subsection (3) in government Amendment 63 is very clear on that point. I am happy to speak to my noble friend afterwards, but I am very clear that they are not expected to shoulder the burden. They are effectively leaseholders that have enfranchised as opposed to freeholders. I hope that helps.
My noble friend also wanted to know about the drafting for cladding and non-cladding costs. All remediation for building safety risks is in Amendment 66. Protections for the cost of cladding remediation are in new paragraph 8 of Amendment 92. I hope that signposting those points will help.
The noble Earl, Lord Lytton, wanted to know what we are doing to make sure that we get moneys ahead of secured creditors. We acknowledge that that is an incredibly important point, and we are looking into it, so I thank the noble Earl for raising that. He also spoke to Amendment 72, which asks whether it is designed to catch commercial developers. The answer is—read my lips—yes, it is. It is important that we address these points in Committee, and of course we will return to that on Report.
Amendments 65 and 66A would amend the Government’s leaseholder protection amendments that I outlined earlier in the debate. Amendment 65, in the name of my noble friend Lord Naseby, would amend our new clause introduced in Amendment 64 defining a qualifying lease for the purpose of the protections. The amendment would extend the protections to cover landlords with more than two properties. At this stage, I am afraid that we will not be able to accept this amendment.
All buy-to-let landlords benefit from our £5.1 billion building safety fund to fix cladding on high-rise buildings, irrespective of how many properties they own. In January we committed to additional protections on
non-cladding costs for residential landlords who have had to move out of their flat. This week’s amendments deliver on that and go even further by protecting landlords who own two properties.
We are clear that developers must pay to fix cladding on medium-rise buildings; the principle of protecting leaseholders living in unsafe buildings is paramount. The policy is fundamentally designed to ensure that those living in their own home—including those who have moved out and sublet—do not face unaffordable remediation bills.
My noble friend Lord Blencathra has also put forward Amendment 66A. I assure my noble friend that his intention has been met in the original amendment. The meaning of “relevant defect” in Amendment 66 covers defects which have caused a building safety risk because of work, or a lack of work, carried out on the building.
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