LABOUR’S MOTION calling on the government to undertake further cladding action was passed, with a ‘lengthy debate’ seeing Conservative MPs urging the government ‘to act’.
Yesterday, it was reported that the Treasury was being beseeched to add a ‘substantial’ amount of cladding remediation funding, with a ‘Cabinet tussle’ over increased funding seeing pressure ‘mounting’ on Chancellor Rishi Sunak from Housing Secretary Robert Jenrick. Ministers were ‘considering’ imposing levies on construction firms, with government sources discussing the ‘intensive efforts’ made to add a ‘substantial sum’ to a developers levy.
Earlier this month the government was said to be considering funding fire safety works on residential blocks via a £2bn levy on developers - which could raise up to £200m a year for a total of £2bn in 10 years, and ‘could mean a levy on all high rise flats and [a] separate charge on major builds’ to ‘atone for building tens of thousands of flats and homes with unsafe cladding and insulation in recent decades’.
The proposals are part of the package of measures being discussed by Mr Sunak and Mr Jenrick, including two annual levies to ‘ease the financial burden on leaseholders’, including adapting the existing community infrastructure levy that sees developers ‘pay to improve the community in return for planning permission’.
The second meanwhile would be a ‘gateway levy’ that would see developers pay a levy on new high rise flat blocks, which would ‘meet demands by campaigners’ to ‘stop big developers shirking their responsibility’. Leaseholders remained concerned the plans ‘do not go far enough and will still lumber them with huge long-term loans to pay’, which could take 30% off the value of homes.
The government was also said to be considering a hardship fund to provide extra help to those facing the largest bills; a cap on repayments to help those facing bills of up to £100,000; prioritising grants for those in high rise blocks ‘who are at most risk’; and a five year freeze on repayments until 2026 or later.
There were however ‘grave concerns’ expressed by the All-Party Parliamentary group for Leasehold Reform after their meeting with government adviser Michael Wade earlier this month. Co chairman Justin Madders understood ministers were ‘going ahead’ with a loan scheme that ‘puts the majority of costs on the unquestionably innocent party. The government is going to frontload it in a way that gets the work done, but ultimately saddles people with huge debts’.
Last week, Prime Minister Boris Johnson promised that the government would provide a plan for the crisis ‘very shortly’, while Labour brought forward a vote and a list of proposals to parliament yesterday that aimed to protect leaseholders from paying for fire safety works – including remediating cladding.
December’s reveal that Mr Wade – the government’s advisor appointed to advise on cladding issues – had been ‘working on a proposal to provide long-term finance to buildings to pay for remediation work’ had been reported earlier that month to have been in the form of flat owners taking on 30 year loans ‘akin to a second mortgage’ to fix fire safety issues.
Mr Wade, an insurance executive appointed last July, was said to have been ‘considering long-term loans’ as a solution to protecting leaseholders from ‘unaffordable’ costs ‘without burdening taxpayers further’. This was said to potentially mean ‘hundreds of thousands’ of flat owners could ‘be forced to take on 30-year loans akin to a second mortgage’ to fix issues.
A loan of £30,000 to fix a ‘typical mix of risky cladding, missing fire stops and flammable balconies’ would add around £1,500 per year to household bills at a 3% interest rate. Building Safety and Fire Minister Lord Greenhalgh had told the House of Lords in December that levies ‘do not raise very much, and you have to balance that with the need to build more homes’, though later ‘advocated’ them as helping to allow developers to ‘regain the public trust needed to carry on in business’.
Mr Wade was said to have told stakeholders that private finance ‘is the only solution as the Treasury has made a definitive statement that it will not provide a penny more in additional grants for removal’. Should the proposals be adopted, ‘it would be possible to seek additional funds from future parliaments, developers or other entities to reduce the size of the loans.
A letter sent a fortnight ago by Chancellor Rishi Sunak to cladding campaigners said that the government is ‘working at pace to develop financial solutions’, and that Mr Wade’s appointment was to ‘accelerate work with the financial sector and insurers to develop proposals to protect leaseholders from unaffordable costs’.
Labour’s proposals called for the creation of a national cladding taskforce to oversee remediation work, which had been ‘successfully applied’ in Victoria, Australia and ‘led the effort to identify, prioritise and remediate’ combustible cladding, while England’s ‘decentralised approach means we still do not even have a comprehensive figure for the number of buildings affected’.
The party’s six demands included ‘immediate up-front funding for removing’ cladding as well as ‘other urgent fire safety work’; protection of leaseholders and taxpayers ‘by pursuing those responsible for the cladding scandal for costs’; and a ‘new, legally enforceable 2022 deadline to make homes safe’.
Other demands consisted of legislation ‘to protect residents from costs’; ‘getting the market moving’ by ensuring those affected can sell and remortgage homes; and ‘stamping out rogue builders’ via reform of the sector. The symbolic vote was accompanied by an amendment to the Fire Safety Bill ‘seeking to achieve the same result when that legislation returns’.
Labour also published analysis from the New Build Database and the Office for National Statistics that suggested 11m people might be affected by the cladding crisis, or ‘one in every five people in England’ in up to 4.6m properties housing an average of 2.4 residents each. The Guardian and Inside Housing have now reported on the debate and vote yesterday, which saw Conservative MPs join Labour and other parties in ‘urging the government to act’.
Conservative politicians warned their own party that ‘not enough was being done’ to help leaseholders, and while developers and manufacturers ‘should be pursued for costs’, they also urged the government to ‘step in immediately to prevent more people being presented with unaffordable bills’.
Bob Blackman, Harrow East MP on the Housing, Communities and Local Government Committee (HCLGC), said: ‘Three and a half years after the Grenfell tragedy, we are in a position whereby we still now have leaseholders living in unsaleable, unmortgageable, uninsurable, unsafe properties, and that is a disgrace that we have to put right. It is fundamental that leaseholders should not have to pay a penny piece towards the costs of remediating the unsafe cladding that is there.’
The vote saw the Conservatives ordered to abstain, with the remaining MPs voting 263 to 0 to support the ‘non-binding motion’. Shadow housing secretary Thangam Debbonaire opened the debate by stating: ‘All big players in this crisis have spent the last few years pointing fingers and avoiding responsibility.
‘Leaseholders simply can’t afford it and shouldn’t have to. If you bought a new car which turned out to be dangerous, you wouldn’t expect to be told to take out a loan of tens of thousands of pounds to pay for it. And this is people’s homes.’
The news outlet added that over 30 Conservative MPs signed an amendment to the Fire Safety Bill which would ‘bar building freeholders from passing the costs of removing cladding or other fire safety work on to leaseholders’. Conservative MP Royston Smith, who co led the amendment, added: ‘Leaseholders bought their homes in good faith.
‘They would have trusted the developer to build a safe home, and they would have trusted the government to ensure that it conformed to the law. Today I’m asking the government to accept our amendment and, once and for all, tell the leaseholders it’s not their fault and they will not have to pay.’
His fellow Conservative MP and co leader of the amendment, Stephen McPartland, added that he ‘could not accept’ the loans proposal, as ‘having such debt on a property like that is not affordable’. Both were disappointed that Labour had ‘not simply supported’ their own amendment ‘which would then be close to a Commons majority’, though Labour said it would back it in a vote.
In response, Housing Minister Christopher Pincher said that an announcement would come ‘very shortly’, but the issue was ‘complex and involved many factors […] there is no quick fix; if there was then we’d have done it long ago’. A series of Conservative MPs told him that the funding released so far ‘would not be enough’, and that action ‘was needed rapidly’.
HCLGC chair Clive Betts, while agreeing that it was ‘right’ to pursue companies that were involved in fitting combustible cladding for costs, ‘this would take time’ and some ‘had gone out of business’, so the government ‘must commit the money’ and could ‘recoup’ it via the levy proposal. Inside Housing noted that 63 MPs recounted constituents’ stories and experiences of the cladding crisis, with Homelessness Minister Eddie Hughes concluding the debate for the government.
He said that it had ‘taken concrete steps to hold those to account’, and that ‘there is consensus across the house’ that forcing leaseholders to pay ‘is completely unacceptable […] that is why the government has been accelerating work on a long-term solution to this problem. We’re working at pace to develop a financial solution to protect leaseholders from unaffordable costs. The secretary of state will be making an announcement on this important work at the earliest opportunity’.
A spokesperson for the End Our Cladding Scandal campaign group stated: ‘It was encouraging to hear that so many MPs from all political parties understand the awful circumstances in which so many of us are living. We thank all of those who spoke and call on them to remember their comments and vote with their conscience to protect us and all of their constituents when future amendments come.
‘However, the government’s comments were as disappointing as we have come to expect. We have heard the same empty words for years and it is well past time for action. To be clear – leaseholders refuse to pay for the multiple failings of government regulation and the building industry. The fact that Robert Jenrick could not even be bothered to attend shows, tragically, that this issue still does not have the priority it deserves within government.
‘Boris Johnson and Rishi Sunak must now listen to the rising level of concern within their own party. If they do not act to protect leaseholders, they will be making a colossal political mistake which will not be forgotten by millions of voters.’
Read our article 'What is cladding?' here