Government efforts to dump arbitrary fire safety costs onto owners of leasehold flats are thwarted in the Lords by rebellion led by bishops
By Liam Spender
For the second time, the House of Lords threw out the government’s Fire Safety this afternoon. In an unusual step, the Lords voted 326-248 to restore to the Bill a Commons amendment tabled by Conservative MPs Stephen McPartland and Royston Smith. The Lords amendment was moved by the Bishop of St. Albans, the Right Reverend Dr. Alan Smith.
The McPartland-Smith/St. Albans amendment seeks to protect leaseholders from the costs of remedial works to be required under the revised Fire Safety Order.
The government objected to the amendment being included in the bill for three reasons. First, it was claimed the Fire Safety Bill was not the correct place to address the issue. Secondly, the government warned of sticky legal consequences if the amendment were adopted. Thirdly, the government said the amendment was impractical and would impose unfair costs on freeholders without due consultation.
There were powerful speeches from the Bishop of St. Albans and the Lord Bishop of London during the debate today. Both bishops focussed on the government’s moral obligation to spare leaseholders from costs. Both bishops also emphasised the developer’s societal responsibilities to pay to clean up the consequences of their own mess, particularly given the effect this is having on first-time buyers.
Both clerics supported the idea of the government providing up front funding to remediate building safety defects, to be recovered by a levy on developers, cladding manufacturers and others to recover the costs. The Leasehold Knowledge Partnership first proposed such a model in December 2020, which is explained here: https://www.leaseholdknowledge.com/as-17-of-cladding-leaseholders-consider-bankruptcy-lkp-funding-proposal-offers-alternative-to-successive-crises-facing-flat-owners/
Full debate here:
Relevant documents: 25th and 29th Reports from the Delegated Powers Committee 2A: Because the Government has announced that it intends to bring forward its own legislative proposals to address the issues mentioned in the amendment.
Even pro-freeholder peers such as the Earl of Lytton – a chartered surveyor by profession – recognised the injustice to leaseholders in the current inadequate solution offered by government to solve the building safety crisis. Lord Lytton pondered whether it was time to go beyond leasehold reform and overhaul the Law of Property Act 1925 – still a foundational property law statute – to get rid of the “buyer beware” principle, to ban the use of special purpose vehicles in construction and for freehold ownership and to imply terms as to the fitness for purpose of buildings in the same way as are implied for consumer goods.
Lord Adonis also made a speech that combined a plea for better law making with one of compassion for leaseholders facing extraordinary and unforeseen costs. Lord Adonis also challenged the discrepancy between the government’s preferred £9,000 per leaseholder estimated remediation costs against the £50,000 per leaseholder reported by Inside Housing’s most recent survey (https://www.insidehousing.co.uk/news/news/one-in-six-cladding-leaseholders-exploring-bankruptcy-options-survey-reveals-69475). Lord Greenhalgh said he did not recognise the higher figure, which he believed incorporated a variety of different costs.
Lord Greenhalgh – the Minister of State for Building Safety responsible for piloting the bill through the Lords – looked uncomfortable responding to the debate, largely reading from his prepared remarks. As Crossbencher Baroness Ruth Deech observed on Twitter during the debate, it was an “utterly inadequate response from government, not even delivered with any assurance.”
What does the result mean for leaseholders?
The substantial 78 vote majority in favour of the McPartland-Smith/St. Alban’s amendment causes a serious political and logistical headache for the government.
The logistical headache stems from the fact that the Fire Safety Bill will now be further delayed and require yet more Parliamentary time to resolve, squeezing the time available for other legislation.
The political headache comes not least as a result of 3 Conservative peers rebelling and voting in favour of the amendment in the Lords today.
The vote underlines that the government has badly misjudged Parliamentary and national feeling on this issue. It is not often that the Lords insists on adding back amendments in this way. Still less by an increased majority, as happened here. The 326-248 vote in favour of the amendment today bettered the November 2020 performance of Baroness Pinnock’s attempt to amend the same bill to spare leaseholders from costs.
Baroness Pinnock’s November 2020 amendment was carried 284-267, a majority of 17. Today’s majority was more than 4 times than that achieved on the last vote. The last vote also saw no Conservative peers rebel against their whip. Full result from November here: https://votes.parliament.uk/Votes/Lords/Division/2367
The Conservative rebels in the Lords included Lord Mackay of Clashfern, Lord Chancellor 1987-97, showing the government’s legal reasons for refusing the amendments carry little weight with the legal profession.
Other legal luminaries had no truck with the government’s legality arguments against the amendment. The former Lord Chief Justice of England and Wales, Lord Woolf, together with Baroness Butler-Sloss, former President of the High Court Family Division, also voted in favour of the amendment.
The former Cabinet Secretary, Lord Butler, also voted in favour of the amendment, suggesting that the government’s practicality arguments are overblown. Or, as Lord Newby and Lord Adonis claimed during the debate, the government’s excuses sounded like quotes from the 1980’s TV programme “Yes Minister”. Perhaps Lord Butler agreed?
Today’s Lords vote result on the amendment is here: https://votes.parliament.uk/Votes/Lords/Division/2487
What happens next?
The Fire Safety Bill will now return to the Commons. Both Lords and Commons must agree on the same text before a bill can become law. Unlike on 24 February, when the government was able to use procedural tricks to avoid giving MPs a vote amendments to protect leaseholders, this time this is the only amendment on the table when the bill returns to the Commons.
Unless it is willing to make a deal to ensure no further opposition from Lords or Commons, the government will have to hold an up or down vote on whether to keep today’s amendment or not.
As many as 33 Conservative MPs signed the same amendment when it was put forward to the Commons on 24 February. 21 Conservative MPs broke the whip and abstained from the vote.
The full Commons vote result from 24 February 2021 is here: https://votes.parliament.uk/Votes/Commons/Division/976
Can the government be defeated in the Commons?
The Fire Safety Bill is England and Wales applies to England and Wales only. Theoretically, English Votes for English Laws rules apply, meaning only English and Welsh MPs are able to vote in the Commons.
Excluding Scottish and Northern Irish MPs gives the government a majority of 145 across the 573 England and Welsh constituencies. A rebellion of 73 backbench Conservatives would be required to force the government to accept the amendment in the Commons on English Votes for English Laws rules.
English Votes for English Laws rules were suspended last year as a result of the pandemic. When the Fire Safety Bill was before the Common on 24 February, Scottish MPs abstained from the vote to reject Baroness Pinnock’s amendment, but the Northern Irish Alliance, SDLP and DUP MPs all voted against. If a similar pattern is seen when the freshly amended Fire Safety Bill goes back to the Commons this will complicate matters.
Either way, a rebellion of anything close to 40 Conservative MPs will set the government on edge. 40 is the number of Conservative rebels required to overturn the government’s majority when all 650 MPs can vote.
When will the bill come back to the Commons?
The Commons and Lords will have their Easter recess between 25 March 2021 and 13 April 2021. If the Fire Safety Bill is not dealt with by the Commons next week it will have to wait until 13 April at the earliest.
We do know that when the Fire Safety Bill returns to the Commons it will only be debated for one hour. This was agreed as part of the programme motion approved when the Fire Safety Bill was last in the Commons on 24 February.
Commons business for the week beginning 22 March 2021 and beyond is due to be announced tomorrow morning.
The government faces a choice. It can either try to get the Fire Safety Bill through before the Easter Recess or else wait and try another lobbying offensive as it did between 10 and 24 February.
If the Fire Safety Bill is not passed by the end of the current session of Parliament then it will fail and have to go through all Parliamentary stages again. It is unknown when the current session will end. Traditionally sessions have run from November to October. The current session began in December 2019.
What happens if the Commons still does not agree to the amendment made today?
The bill will then have to back to the Lords. The arcane procedural rules of Parliament mean that each House of Parliament may only insist on the same amendment to the same bill twice (the “double insistence” principle). If that happens then the bill will fail and have to go through all Parliamentary stages again.
There may only be one further round of ping-pong between Commons and Lords. In practice, ways are found around double insistence, either by skilful drafting or by the government reaching a deal with rebels.
What happens if the amendment is lost and the Fire Safety bill passes?
If the Fire Safety Bill eventually passes with no amendment to protect leaseholders then the forthcoming Building Safety Bill will be a chance to try to amend the law again.
Depending on the scale of any rebellion against the Fire Safety Bill in the Commons, the government may yet announce further concessions in terms of funding, levies on the construction sector or changes (perhaps even the abandonment) of its proposed forced loans scheme.
Leaseholders still have much to gain and little to lose from today. Affected leaseholders should get on to their MPs, urging them to vote in favour of the amended Fire Safety Bill when it comes back to the Commons.