Ted Baillieu: Your misconceived Twitter thread over the ‘polluter pays’ amendment should be removed

Open Letter

There has been a good deal of heated debate on social media over preferred amendments to the Building Safety Bill, which ultimately will be decided by government ministers and officials.

LKP has long been hardened to the words of detractors, but it was a surprise to be criticised on Twitter, wrongly and unfairly, by Ted Baillieu, the former premier of Victoria in Australia, who co-headed the state’s cladding task force.

Mr Baillieu and LKP have had considerable dealings over the cladding crisis, and he is aware that we are the secretariat of the All-Party Parliamentary Group on leasehold and commonhold reform, which is chaired by Sir Peter Bottomley, Justin Madders and Daisy Cooper: MPs representing the three main political parties in England and Wales.

We have asked Mr Baillieu to remove this series of Tweets; our MP patrons have also asked whether he would like to discuss the matter. There has been no response.

In the past, LKP has reported – and applauded – Mr Baillieu’s robust, bi-partisan approach to the housing sector’s failings, and urged British ministers to take a similar stance (which under Michael Gove and Lord [Stephen] Greenhalgh, they have done).

Ted Baillieu, ex-pm of Victoria, tells London cladding leaseholders that Australians identified flats most at risk and sorted them out first (but there were loans to flat owners)

If Mr Baillieu had concerns about LKP’s position on the Building Safety Bill, and our interaction with officials and ministers, he could easily have contacted us privately. Instead, he chose to make a series of emotive, untrue and misconceived comments on Twitter (below).

If LKP had the kind of influence Mr Baillieu claimed, the building safety crisis would have been resolved years ago. We would also currently be enjoying the fruits of commonhold. The fact that we are not underlines the inaccuracy of Mr Baillieu’s misguided attack.

He seems to think it necessary to point out that the Leasehold Knowledge Partnership’s primary concern is reforming the leasehold system in England and Wales, which many might think is self-evident. His view seems to be that in addressing the Building Safety Bill we are dealing with a secondary concern.

This will surprise those leaseholders who acknowledge that LKP was raising the post-Grenfell cladding issue from the autumn of 2017, and was the only organisation to hold meetings at Westminster on the subject. This was long before the cladding crisis became a mainstream issue in the media, or in Parliament. It was before most leaseholders realised that they were shortly to become ensnared in a mess that has now gone on for nearly five years.

It is the case, in our view, that the position of flat owners in England and Wales – who are merely long-term tenants in English law – is far worse than that of Australian commonhold strata title owners, and that this fact has impacted the handling of the crisis here by government, developers, freeholders and the property managers that the latter employ.

With such an unsound and unfair form of property tenure such as leasehold, injustices invariably fall on the unwitting homebuyers, who had no idea of the vulnerability of their acquisition when they bought their flats.

It was in large part thanks to LKP, which came up with a sector-wide levy scheme, that the government’s deeply unfair forced loans scheme to leaseholders idea was abandoned.

Virtually every day section 20 major works bills to remediate fire safety defects are landing on leaseholders’ doorsteps. Countless others face horrific waking watch and insurance costs. We remain alive to the risk that if no other source of funding emerges, and Mr Gove’s initiative to get the housebuilders to pay up £4 billion fails to deliver, then leaseholders will be left facing the bill.

One thing is for sure, the anonymous and invariably offshore punters who have hoovered up residential freeholds over the past 25 years – the supposedly responsible “long-term custodians” of blocks of flats – won’t pay a penny or suffer the slightest impact on their income streams.

Mr Baillieu vehemently endorses the so-called “polluter pays” principle as “comprehensive, equitable and simple”.

From the start of the crisis majority opinion has held that the producer not the consumer should be made to pay, but until recently the government was drafting legislation to ensure that leaseholders were made liable for all historic costs.

The term “polluter pays” has been used to promote one of the solutions put forward to the Building Safety Bill, but in effect all the latest amendments from the government are designed to do just that.

To what extent the “polluter pays” proposal does or does not work is open to debate. But it was surprising that its advocates did not engage with lawyers, MPs and others experienced in the leasehold system. When the wording of the proposal was finally released last December, a number of property lawyers raised concerns.

In short, there are different opinions on the ideal course to follow. We are free to express ours. The fact that the promoters of the “polluter pays” amendment characterise every question and observation as an attack is not the fault of the LKP.

The promoters of the amendment should reflect on whether it was wise to promise so much to so many vulnerable people without any clear plan as to how they would deliver without support from the government.

LKP has always argued that flaws in the leasehold system have a significant impact on the cladding crisis and that until we have the wider reforms, being planned for the next session of Parliament, we are at best putting another sticking plaster on a fundamentally flawed system.

Mr Baillieu perhaps also fails to understand that there are important elements of leasehold law in the Building Safety Bill. Passing the Bill without addressing those flaws — particularly around the Building Safety Charge and Building Safety Manager — is likely to trigger another spate of leaseholder gouging from the vested interests in the leasehold sector.

The LKP’s door is open if Mr Baillieu would like to hold a constructive discussion in private.

In the meantime, we make public our request that he deletes his emotive, untrue and misconceived Twitter thread.