My Lords, in his Amendments 274, 318, 320 and 325, the noble Earl, Lord Lytton, returns us to subjects that we debated extensively this time last year in what was then the Building Safety Bill. I say to the noble Earl, with the greatest of respect, that this House and the other place considered his arguments carefully last year and rejected them. I really do not think that this Bill is an appropriate place to try to reopen these issues.
Last year, the Government opposed the noble Earl’s scheme and proposed an alternative, the leaseholder protection package, which was agreed by your Lordships and the other place. As your Lordships will be aware, the leaseholder protections in what is now the Building Safety Act 2022 have been in force since June 2022 and form part of the Government’s response to the need to fix defective buildings, alongside a number of other measures that my right honourable friend the Secretary of State set out recently in a Statement in the other place, which was repeated for your Lordships.
Those protections are complex. I would be very happy to have a meeting with interested Peers to discuss the Government’s actions in detail if that would be helpful. If any noble Lord would like to do that, they can get in touch with me or my office and we would be very happy to set that up. But, as I said, the protections are complex and it is true that it has taken time for the various professionals working in this space to get to grips with them. None the less, there is now progress on getting work done, getting mortgages
issued on affected flats and moving the conversation forward with the insurance industry to ensure that remediation can be undertaken and that building insurance premiums, which had been excessively high, reflect this reduction in building risk.
I want to be clear with your Lordships: the leaseholder protections are working. The first remediation contribution order to get money back for leaseholders has been made by the tribunal and is being enforced now. In response to my noble friend Lord Young of Cookham, I can say that there have been a further 12 applications for remediation orders to the First-tier Tribunal and nine for contribution orders; that is up to the end of December—we do not have any further updated figures.
The Government’s recovery strategy unit is litigating against large freeholders, and leaseholders have the peace of mind that the remediation bills they were facing—sometimes for more than the value of their home—are no more. I emphasise to your Lordships that changing the basis on which leaseholders are protected would set back by months the progress of remediation work, which is finally happening at pace, and would create further uncertainty in the market.
In addition to the inevitable delay to remediation that would be caused if the noble Earl’s proposals were adopted, I must emphasise that the objections set out by my noble friend Lord Greenhalgh, when he spoke from this Dispatch Box last year, are still relevant. The building-by-building assessment process that he proposes would be both costly and time-consuming, which would not be in anyone’s interest.
While the noble Earl says that his scheme seeks to avoid litigation, our experience shows that the level of complexity and the sums at stake in this field mean that litigation is inevitable—and will necessarily take place in the High Court, rather than the expert tribunal already dealing with disputes under the leaseholder protections, increasing costs and the time taken to resolve cases. I should also make it clear that the Government’s package of measures in this space goes much further than the leaseholder protections set out in the Building Safety Act.
At this point, I would like to answer a few questions. Both my noble friend Lord Young and the noble Earl, Lord Lytton, brought up the point of “under 11 metres”, which I know has been an issue raised. I think I have said many times at this Dispatch Box that the views of the independent experts are clear: there is no systematic risk in buildings under 11 metres. However, we continue to look at these on a case-by-case basis and provide any help to those leaseholders accordingly. If my noble friend Lord Young of Cookham would like to let me have the letter that was sent to him, I would be happy for the team to look at it.
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There are other non-qualifying leaseholders, as we have heard, who are not protected under the Government’s scheme. The protections were always intended to protect people from the cost of fixing their homes. They spread the cost among the various parties who have invested in property—be that developers, freeholders or commercial leaseholders—on the basis that all investments carry a degree of risk.
The leaseholder protections already provide a number of protections for those leaseholders who do not qualify for full protection. First, where landlords are, or are connected with, the developer, all leaseholders are fully protected. In other buildings, where some leaseholders are qualifying, the non-qualifying leaseholders cannot have their share of the costs increased to meet a shortfall in funding. Non-qualifying leaseholders are able to seek a remediation contribution order from the tribunal against a developer, contractor et al in exactly the same way as qualifying leaseholders. In addition, where a developer has signed the developer remediation contract, they will fund all necessary remediation work, both cladding related and non-cladding related, irrespective of whether individual leases in those buildings are qualifying under the protections or not.
My noble friend Lord Young of Cookham asked whether the Government have sufficient funds to pay for remediation. The purpose of the building safety levy is to raise funds to cover the cost of the remediation of historic building safety defects. The Bill was amended to expand the scope of the levy and raise the revenue required to fund essential remediation work, so there is enough money in the pot.
My noble friend is absolutely right about enfranchisement. We have been out to consultation. We are now considering the responses on enfranchised buildings and will bring forward proposals in due course.
The noble Baronesses, Lady Hayman of Ullock and Lady Pinnock, asked when the Government will resolve the issues of protecting leaseholders. We are carefully monitoring the operation of the leaseholder protections. If any changes are necessary, we will bring forward appropriate guidance or legislation to make those changes as soon as possible. We have a recovery strategy unit that is taking forward litigation against large property owners to ensure that they meet their responsibilities. So we have not forgotten them; we are continuing to monitor the issue and will make changes as required.
So far, so good. I shall now address Amendments 274 and 318 in detail. The amendments call for the creation of a building safety remediation scheme with powers to halt development through the planning system. I point out that the Building Safety Act already enables the Government to do that. Using powers provided by the Act, the Government intend very soon to lay regulations to establish and implement a responsible actors scheme and, subject to parliamentary approval, the regulations are expected to come into force in early summer 2023. To join the scheme, eligible developers will have to enter into, and comply with the terms of, the developer remediation contract. As of today, 46 developers have signed the developer remediation contract, including all the top 10 housebuilders.
The developers that sign the contract are contractually obliged to fix life-critical fire safety issues in all residential buildings over 11 metres in height that they had a role in developing or refurbishing in England in the last 30 years. The scheme will recognise the positive action of responsible developers. Eligible developers that do not enter into and comply with the terms of the developer remediation contract and join the scheme will be prohibited from carrying out major developments and gaining building control sign-off.
The scheme is an important step towards resolving the cladding crisis and is an important part of the overall strategy to protect leaseholders from bearing costs unfairly, while making sure that industry contributes to the cost of putting right historic building safety defects. Where developers or building owners do not take responsibility for cladding remediation, the Government have committed £5.1 billion, including £4.5 billion for the building safety fund, to address life-critical fire safety risks associated with cladding in high-rise residential buildings of 18 metres and over in England.
Amendments 320 and 325 would mean that proceeds from the infrastructure levy could be used to support building remediation. Using powers under the Building Act 1984, the Government will lay before Parliament affirmative regulations to enable a new building safety levy to be imposed. The purpose of the building safety levy is to meet building safety expenditure. The building safety levy funds will be used to offset the costs incurred by the public purse in providing financial assistance to improve the safety of buildings in England. The new levy will apply to new residential development unless the development is excluded. It is anticipated that the building safety levy will raise £3 billion to address cladding, as well as other building safety issues, in cases where developers do not take responsibility.
It is important that local planning authorities can use infrastructure levy revenues to fund local infrastructure in their area, such as affordable housing, GP surgeries, schools and roads, to mitigate the impact of development on an area. It is therefore right that the introduction of the building safety levy will support building safety matters separately.
Amendment 504GJD, tabled by the noble Baroness, Lady Hayman of Ullock, would require Ministers to make a Statement to Parliament outlining their position on single staircases in large multiple-occupancy residential buildings within 60 days of the passage of the Bill. The department has been clear in our commitment to ensure that residents are, and feel, safe in their homes. I agree with the noble Baroness that that is vitally important.
In December 2022, we launched a consultation asking for views on the provision of single stairs in residential buildings. Our consultation contained a clear proposal to introduce, for the first time in England, a maximum height threshold of 30 metres for using a single staircase in residential buildings. The consultation closed on 17 March. We have received over 280 responses, and it is right that we carefully consider the responses received to ensure that all the evidence is considered. We will set out further information on the timing and policy direction at the earliest opportunity.
In conclusion, I hope that the reasons I have set out provide sufficient assurance that the noble Earl, Lord Lytton, will be able to withdraw his amendment, and that he and other noble Lords will not press the other amendments. I hope this has also provided positive news for the noble Baroness opposite and that she will agree not to move her amendment when it is reached.