I am encouraged that the Government is introducing an entirely new regulatory regime for high-rise buildings, that will take a proportionate, safety-first approach. The Building Safety Bill will set out a clear pathway on how residential buildings should be constructed and maintained.
The Bill will embed a Building Safety Regulator within the Health and Safety Executive, which will oversee the new building safety regime. The Regulator will be responsible for ensuring that any building safety risks in new and existing high-rise residential buildings of 18 metres and above are effectively managed and resolved, taking the cost into account. It will also hold to account those who break the rules and are not properly managing building safety risks, including taking enforcement action where needed.
Central to this world-class regime are the residents at its heart, which is why the Building Safety Bill will give residents a stronger voice in the system, making it easier for them to seek redress and to have their voices heard. The Bill will require an accountable person for a high-rise residential building to engage with their residents and establish a formal complaints process for them to raise concerns. A Residents’ Panel will also be created, which the Building Safety Regulator will consult on matters of interest and importance for residents of higher-risk buildings.
Crucially, the Secretary of State has announced that statutory protection for leaseholders will be introduced into the Building Safety Bill. This will mean that the ultimate owner of a building will be held responsible for all the work that is required to make it safe. I understand that work is taking place across government to provide the most robust legal protection and I look forward to further details.
On top of this, the Government is significantly increasing the amount of time that residents can seek compensation for substandard construction work. Under new amendments to the Bill, residents will be able to bring claims under the Defective Premises Act for 30 years retrospectively and 15 years prospectively. Residents will also be able to seek compensation for shoddy refurbishments which make homes unliveable.
I have been following this important legislation closely and I am aware of amendments seeking to add additional measures to the Building Safety Bill. Well-intended though these are, I do believe that the Bill already makes substantial provision to create a proportionate building regime whereby the right people are held to account.
Furthermore, announcements made by the Secretary of State to ensure that those who manufactured dangerous products, developed unsafe buildings, or profited from the crisis pay to make it right will help to further strengthen the Building Safety Bill.
The introduction of statutory protection for leaseholders is something that I am sure will be welcomed by leaseholders up and down the country, as will the words of the Secretary of State that “no leaseholder living in a building above 11 metres will ever face any costs for fixing dangerous cladding”.
I have been assured that the Department is aware of arguments surrounding VAT on remediation works and is looking into this issue.
Furthermore, I also recognise the concerns raised about the costs of non-cladding building safety work. In the aftermath of the Grenfell tragedy, the independent expert panel recommendation was to focus on unsafe cladding, which is why the remediation of cladding has been at the centre of making buildings safe. It is also the case that unsafe cladding acts as an accelerant to fire spread, and funding will remove the biggest obstacle to remediation proceeding.
However, I am encouraged that the Secretary of State has confirmed that the Department is looking at the issue of non-cladding costs, with ongoing work to incorporate statutory protection for leaseholders in the Building Safety Bill. I look forward to further details on this in due course.
As you will know, the Government has stepped in to provide £5 billion to remediate dangerous cladding in high-rise residential buildings of 18 metres and above in England.
The Secretary of State has also been clear that developers will have until early March to agree to a fully funded plan of action to remediate dangerous cladding on medium-rise buildings (11 to 18 metres) in England. Ministers assure me that all steps necessary will be taken to make this happen. If industry fails to take responsibility, the Government will, if necessary, impose a solution in law.
Cladding and insulation manufacturers also have until March to agree a settlement that will restore confidence and secure an appropriate contribution from the sector.
I am also encouraged that a new UK Residential Property Developer Tax is set to be introduced from April 2022 and the Building Safety Bill will take this further by introducing a new Building Safety Levy when developers seek permission on certain high rise buildings. This will further ensure that industry pays its fair share towards these costs.
However, I recognise that there is concern amongst leaseholders regarding the rising cost of building insurance premiums in high-rise flats, even in properties unaffected by cladding issues. That is why I am encouraged that the Minister for Building Safety, Lord Greenhalgh, will be working with insurers on new industry-led approaches that bring down premiums facing leaseholders. Let me assure you that I will continue to follow developments in this area closely.
As you may know, Building Safety Minister, Lord Greenhalgh, has clarified that leaseholders who have moved out of their homes and are subletting them will not be excluded from the protections the Government is putting in place. This includes those in shared ownership properties.
I understand that further details on this will be confirmed soon.
Furthermore, I completely understand the concerns raised about leaseholders who have already paid towards cladding remediation costs. It is crucial that those who manufactured dangerous products, developed unsafe buildings, or profited from the crisis take full responsibility for their actions and pay to make it right. That is why I am relieved that the Government will introduce statutory protection for leaseholders into the Building Safety Bill. I should stress that the Secretary of State has indicated that this will extend to all the work required to make buildings safe, and I look forward to further announcements.
I have been assured that, as the Department ensures that individuals do not face costs in the future, work will take place across government to ensure that the most equitable position possible is reached. I have ensured that my ministerial colleagues are aware of the strength of feeling on this matter.
It is absolutely right that the Government is ensuring that those who profited, and continue to profit, from the sale of unsafe buildings and construction products take full responsibility for their actions and pay to put things right. It is unfortunately the case that some in the development industry have taken steps to evade responsibility, which is why I am encouraged by the Secretary of State’s commitment to work across government to bring those who are responsible to account.
A dedicated team has been set up in the Department for Levelling Up, Housing and Communities to expose and pursue those responsible. Ministers assure me that all steps necessary will be taken. If industry fails to take responsibility, the Government will, if necessary, impose a solution in law.
The law is clear that service charges must be reasonable, and the work or services paid for must be of a reasonable standard.
I should also stress that, as laid out by the Secretary of State, statutory protection for leaseholders will be introduced into the Building Safety Bill. This will mean that the ultimate owner of a building will be held responsible for all the work that is required to make it safe. I understand that work is taking place across government to provide the most robust legal protection and I look forward to further details.
The Government is protecting leaseholders from forfeiture and eviction due to historic fire safety costs. As such, the Secretary of State will extend existing protections against forfeiture of a lease on the ground of non-payment of a service charge to non-payment of a building safety charge
It is my understanding that the Building Safety Charge will only cover the ongoing costs of the new building safety regime, giving leaseholders assurance, transparency, and protection in relation to ongoing building safety costs. It has been made clear that it is the responsibility of the building owner or responsible person to ensure the safety of residents, and I am glad that the Government has called on them to do all they can to protect leaseholders from remediation costs.
A cornerstone of the Building Safety Bill is the establishment of the New Homes Ombudsman, which all developers will be required to join and remains members. Those who breach this requirement may be subject to additional sanctions. I am encouraged that the Ombudsman will introduce a code of practice about the conduct and workmanship of its members and will require developers to provide redress to homebuyers where necessary, including through the awarding of compensation.
Ensuring that everyone has a safe and high-quality home must be a top priority and I am pleased that considerable steps have already been taken to improve our housing. An independent review of the system for testing construction products has been launched, led by two experts. The panel will engage with a wide range of stakeholders and examine how to strengthen the current system to provide confidence that materials are safe and perform as marketed.
Building on this, the Building Safety Bill will strengthen the regulatory framework for construction products, underpinned by a market surveillance and enforcement regime led nationally by the Office for Product Safety and Standards. The national regulator will be able to remove products from the market that present safety risks and prosecute or use civil penalties against any business that breaks the rules and compromises public safety.
I am confident that these reforms will tackle bad practice head on, building on the recommendations made in Dame Judith Hackitt’s Independent Review of Building Regulations and Fire Safety.