Why new safety laws could do more harm than good

Graham-Watts

As increased liability pushes insurance costs beyond reach of most firms, capacity to fix unsafe homes or build new ones will plummet

On 21 February the House of Lords began the committee stage of considering the Building Safety Bill, and it will sit at various sessions into early March. It will be a challenge: the bill, as brought from the Commons on 20 January, has 234 pages; and an 87-page list of amendments to be moved in committee was published just four days before the first sitting. The proposed legislation has already been subject to 18 months of exhaustive scrutiny (a draft bill was published in July 2020) and this plethora of last-minute, knee-jerk amendments is bound to have unintended consequences. The worst of these is likely to further restrict the industry’s capacity to both remediate unsafe buildings and build safe new housing.

The amendments already look likely to hasten the lemming-like withdrawal of insurers from the construction professional indemnity insurance (PII) market, which in turn will mean that many construction businesses will no longer be able to operate in housing development. This will have a deleterious impact on the capability to remediate unsafe buildings, exactly the opposite of the bill’s primary intention. It will also greatly reduce the capacity to build new housing (including affordable housing) in an era where demand for new homes has lagged way behind supply for decades, creating an ever-increasing aggregate gap in housing provision.

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