My Lords, I am very pleased to speak to a group of amendments that will strengthen our solution in law to ensure that the industry pays to remediate all unsafe high-rise and medium-rise buildings for which it is responsible, and contributes to fund the remediation of all cladding on 11-metre to 18-metre buildings. As discussed during our debate in Committee, we need to take action against those unwilling to make these commitments and impose a solution in law to make sure that developers and manufacturers take responsibility for rectifying building safety defects—the polluter must pay.
Amendments 133 to 136 set out a number of changes to the definition of associated persons within the leaseholder protections provisions. Amendment 137 sets out that partnerships are captured within the definition of an associated company and Amendment 139 defines joint ventures. This will ensure that well-resourced companies cannot make use of complex corporate structures to evade their responsibilities. These amendments pierce the corporate veil.
Amendment 179 confers a power to make regulations to require landlords to provide information to a relevant tenant or other prescribed person
I will now speak to amendments we are making to Clauses 128 and 129, which I moved in Committee. As noble Lords may remember, these clauses give the Government the power to establish building industry schemes. We want to use this power to enable us to establish a scheme to distinguish between building industry actors who have committed to act responsibly and make buildings safe, and irresponsible actors who have failed to do so. The amendments tabled on 22 March add detail to those powers, to reflect more clearly the Government’s intentions and to provide Parliament and the public with more information on the purpose of any building industry scheme or schemes we set up, together with indicative examples of the kinds of membership conditions that eligible industry actors may need to meet to be part of a scheme.
We have made it clear that we expect the industry to act now to take responsibility for fixing building safety defects, and our principal objective in establishing a scheme under this power would be to make sure that we can hold industry to account against this and other obligations. Examples of the kinds of membership conditions that may apply to members of a scheme in connection with these purposes include: the remedying of defects in buildings to which an industry actor has
a connection; and making financial contributions towards remediation of defects in buildings, including by way of contribution to a general industry fund to pay for remediation.
We may also require scheme members not to use certain construction products made by prescribed manufacturers—for example, cladding and insulation products made by manufacturers who have failed to step up and commit to an industry solution by making a financial contribution to remediating unsafe buildings.
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We have also made amendments to Clauses 57, 130 and 131 to clarify the relationship between the building industry scheme clause and other Bill measures. Those amendments link membership of a scheme with the powers to impose different rates of the building safety levy, to block prescribed developers commencing development for which planning permission has been granted and to block prescribed developers being able to obtain building control approval on developments. An entity which is eligible to be a member of a scheme but elects not to join it by making the necessary commitments to be a member may be subject to these measures. We have also specified that any regulations laid for these powers are to be affirmative, requiring parliamentary approval for the design of any schemes.
We hope that using these powers will not be necessary. We expect the building industry to do the right thing and step up to contribute to fixing the building safety crisis. However, if the industry fails to do the right thing to make buildings safe, we will use these powers to make sure that only responsible companies continue to benefit from government support.
Amendments 181 to 185 make changes to remediation orders. First, we are broadening the persons who can apply to the first-tier Tribunal for a remediation order to include a person with a legal or equitable interest in the relevant building or any part of it. This means that, for example, a leaseholder will be able to apply to the tribunal to require their landlord to undertake remediation work if they are not doing so. Secondly, we are clarifying that a remediation order may be made against a person who has a repairing obligation for part of a relevant building, even if they would not otherwise be classed as a relevant landlord, to allow a remediation order to be made against, for example, a managing agent. Finally, we are providing that remediation orders are enforceable by the county court.
Amendments 186 to 193 seek to improve the current provisions on remediation contribution orders. First, we are broadening the companies which can have a remediation contribution order made against them to include developers and previous landlords through Amendment 188. This will provide a potentially easier route to secure funding for remediation than through civil action, such as under the Defective Premises Act. The definition of developer is given by Amendment 189.
Following our debate in Grand Committee, we are also proposing to broaden the types of corporate body that can have an order made against them to include partnerships and limited partnerships through Amendments 186, 187 and 192. Partnership is defined
as including partnerships and limited partnerships by Amendment 137 to Clause 123. The issue of limited liability partnerships under the Limited Liability Partnerships Act 2000 was also raised in Grand Committee. I am advised that such partnerships are already included in the definition of body corporate in Clause 123, so no amendment is required to bring such bodies into these provisions.
Amendments 190 and 191 extend who can apply for a remediation contribution order to include the Secretary of State and any other person prescribed through secondary legislation. This is to provide flexibility in case it becomes apparent there are further groups which should be granted the ability to apply for a remediation contribution order. Lastly, Amendment 193 provides a power to deal with self-contained buildings that are part of a wider structure.
I hope your Lordships agree that remediation contribution orders, with the changes the Government propose, are an important part of the wider leaseholder protection package and that supporting these amendments will ensure we get them right.
I now turn to Amendments 194 to 199 which make changes to the operation of Clause 127 on meeting remediation costs of insolvent landlords. Amendment 194 provides that a person acting as an insolvency practitioner in relation to the company may apply for an order under the clause. This ensures that a wider range of insolvency procedures, such as company voluntary arrangements, are in scope of this clause. Amendment 197 sets out that “insolvency practitioner” has the same meaning as in the Insolvency Act 1986. Amendment 196 makes clear that contributions made by an associated company under the clause are to be used for the purpose of meeting costs associated with relevant defects. Amendments 195 and 198 set out that an order under the clause may be made against a partnership associated with the company that is being wound up.
Amendments 227 and 228 seek to improve the clauses on building liability orders. Amendment 228 would add a new clause to the Bill to support potential claimants in understanding which companies are associated, mitigating against corporate groups employing ever-more opaque and complex structures, which claimants will struggle to unravel.
We are also altering the territorial application of Clauses 132 and 133 to include Wales as well as England. This has been agreed with the Welsh Government and aligns with the territorial extent of the Defective Premises Act and Section 38 of the Building Act.
In response to the remarks of the noble Lord, Lord Stunell, during Grand Committee, I confirm that we consider that the provisions on building liability orders are compatible with human rights legislation. We expect the High Court to consider a variety of factors when deciding whether to grant a building liability order, including the extent of the damages being sought and whether a fair trial can take place. We are considering whether we need to do any further work on this, such as producing guidance with the Judicial College.
The Government consider that building liability orders will be an important tool in holding to account wrongdoers—or polluters or perpetrators, if noble Lords prefer; whether we say “polluter pays” or
“perpetrator pays” is their choice. We must hold them to account. I hope your Lordships will join me in supporting these amendments.
Finally, I will briefly mention Amendments 140, 176, 178 and 230, each of which makes a minor drafting change. I know that noble Lords agree that it is unfair that innocent leaseholders have had to pay thus far, and it is now time for the industry to step up, take responsibility and rectify their mistakes.
I ask your Lordships to support this significant and important set of amendments to ensure that the polluter pays.