Official Report 1035KB pdf
The next item of business is a debate on motion S6M-20285, in the name of Ivan McKee, on the Building Safety Levy (Scotland) Bill at stage 1. I invite members who wish to participate to press their request-to-speak buttons.
15:00
The tragic events at Grenfell tower in 2017 shocked us all and highlighted the need to address the issue of unsafe cladding across all four nations of the United Kingdom. The Scottish Government has been clear from the outset that it will do what is right and necessary to fully address the challenge of remediating buildings that are affected by unsafe cladding. Last year, we published estimates for the cost of the cladding remediation programme, which suggested a funding requirement of between £1.7 billion and £3.1 billion over a 15-year programme of works. That will require a significant amount of capital investment, which will represent sustained pressure on our budget. Nevertheless, it is absolutely necessary that the work is taken forward.
Initially, we called for a four-nations approach to cladding remediation funding. However, the UK Government has chosen to proceed with its own funding model. In October 2026, it will introduce a building safety levy in England.
I understand the financial pressures that the Scottish Government is facing, but it has already received nearly £100 million specifically for cladding remediation. Can the minister say how much of that has been spent and where the remainder of that money is?
I have been clear in the numbers that I have just indicated that between £1.7 billion and £3.1 billion will be required for cladding remediation. That money will be spent as part of the programme of works. As I said, we initially called for a four-nations approach to the funding.
I think that the minister may have misunderstood Craig Hoy’s question. He was asking about the £97.1 million that the Government received from the Treasury for the purposes of the amelioration of cladding on high-rise buildings. Craig Hoy’s question was about how much of the £97.1 million has been spent and how much remains in the fund.
The member is aware that that money will all be spent on cladding remediation. Of course, we first need to identify the buildings and go through the proper process to identify where it will be spent, which is an important part of the process.
The levy in England was introduced by the previous Conservative Administration and is being delivered by the current Labour Administration. The regulations to give effect to the levy achieved cross-party support last year. The principle that we have strived for, as has the rest of the UK, is fairness: fairness for taxpayers and for owners and occupiers of impacted buildings. In that vein, we believe that it is only right and fair that a similar contribution be sought in Scotland to prevent disproportionate costs from falling on the general taxpayer.
The Building Safety Levy (Scotland) Bill will provide vital funding to support the delivery of the cladding programme. That is underpinned by the Housing (Cladding Remediation) (Scotland) Act 2024, which was unanimously supported in the Parliament just over 12 months ago.
I thank the minister for being generous with his time. How would he respond to those who say that not all developers are guilty in the use of cladding and that local authorities, manufacturers and others were involved? Should they not be paying part of the costs?
I have already indicated that the amount that we are asking developers to pay is a small percentage of the total bill for cladding—I will come on to talk about specific numbers. The public purse will be picking up most of the rest of the cost.
I recognise that new tax measures are not popular, particularly with those who will be directly affected by them, but the work of the programme does not come free. No competent alternative funding models have been identified or put forward and no UK-wide solution is forthcoming. As a fiscally responsible Government, we must take those difficult decisions, and we are taking those decisions at a time when the Government is grappling with some of the most challenging financial circumstances since the Parliament was established.
Will the minister take an intervention?
Do I have time, Presiding Officer?
I can give you the time back, minister.
I appreciate that, and I will be very quick. In relation to the minister’s comment that no further proposals were forthcoming, does the minister accept that Fionna Kell from Homes for Scotland said in her evidence to our committee that it was not asked to identify alternatives?
The Government will, of course, listen to people who come forward with proposals, and it is no secret that that work has been under way for a period of time. If there were alternative proposals, we would have expected those to have been put forward.
Regarding the stage 1 report, I take the opportunity to thank everyone who gave evidence during the stage 1 process and the many stakeholders who have supported the development of the legislation so far. I also thank the Finance and Public Administration Committee for its detailed scrutiny of the bill and its stage 1 report. I know that no recommendation was made on the general principles of the bill, and I trust that the committee and the Parliament more widely will receive my response to the stage 1 report and my remarks today in the spirit in which they are intended, which is one of positive engagement with the substance of the committee’s findings and its concerns.
I note that the committee’s primary concern was around impacts. Although both the Scottish and UK Governments assess that the overall impact of the respective levies will be low, it is right that the topic is given appropriate consideration.
I will draw attention to areas where I can provide updates that look to address concerns around impacts. First, regarding the levy-free allowance, as I set out in my stage 1 report response, it is my intention to indicate a 19-unit threshold for the levy-free allowance in the bill. That annual allowance of levy-free units will apply equally across the tax base. Our analysis indicates that a threshold of 19 units will exempt just under 20 per cent of new-build sales from the charge and remove just under 80 per cent of those undertaking relevant development activity from any need to interact with the tax at all. That will, of course, protect small and medium-sized developers by either removing them entirely from the charge or providing a sizeable reduction in their chargeable activities.
The levy-free allowance will play a role in mitigating impacts on rural development, with its effects being most acute in those areas that are designated as “remote small towns” and “remote rural areas” under the Scottish Government’s sixfold urban rural classification. As viability in remote rural areas was particularly raised by the committee, I confirm that we will continue the work that we have been undertaking with rural stakeholders throughout stage 1 to ascertain whether additional measures are required to effectively protect rural development.
The committee also recommended that affordable homes that are funded by local authorities should not be subject to the levy. I agree with that position. Provision that is already included in the bill captures the vast majority of social and affordable homes that are being delivered, and we will continue to engage with the Convention of Scottish Local Authorities and local authorities to ensure that all relevant activity is captured.
The committee raised a further concern around measuring impacts. At £30 million per annum, the levy represents around 0.6 per cent of the value of the new-build housing market in Scotland. It has also been introduced alongside an equivalent levy in England, which significantly reduces any risk of tax arbitrage. I welcome the committee’s ask for further details on the impact. As I stated at my evidence session on the bill on 18 November last year, it is my intention that indicative rates for the levy will be published in June this year, alongside the appropriate impact assessments.
The committee has recommended a strengthening of the reporting requirements in the bill to require the Scottish Government to report at intervals of three years and to include an assessment of the impacts of the measure on the Scottish housing market. I am happy to accept those recommendations and confirm my intention to lodge an amendment at stage 2 to reflect that.
I hope that those updates and commitments address the key issues that the committee highlighted in its stage 1 report, and I welcome any further questions from colleagues.
The bill is about funding cladding remediation in a way that is fair. If the bill is not supported, the Scottish Government will have no choice but to look to the existing capital budget envelope for the amount between £360 million and £450 million that the levy is intended to generate over 12 to 15 years.
I look forward to discussions this afternoon, and I ask members to reflect on my comments now and in my stage 1 report response, and to support the bill at decision time.
I move,
That the Parliament agrees to the general principles of the Building Safety Levy (Scotland) Bill.
I call Kenneth Gibson to speak on behalf of the Finance and Public Administration Committee, for around eight minutes.
15:09
I am pleased to speak on behalf of the Finance and Public Administration Committee, which was the lead committee for stage 1 scrutiny of the Building Safety Levy (Scotland) Bill. I refer members to my entry in the register of members’ interests.
The committee’s call for views on the bill was held between 26 June and 15 August 2025. We received 39 submissions, including those from the house-building, land and property sectors; local authorities; and taxation and law experts. The committee is grateful to those who took the time to share their views, and to our clerking team for their excellent work in advising members and producing our report.
We held three evidence sessions during October and November. Based on the evidence received, we made no recommendation in our stage 1 report on whether Parliament should support the general principles of the bill. We have asked the Scottish Government to respond favourably to our recommendations regarding the provisions and impacts of the bill in order to inform today’s debate. I will therefore focus on some of the committee’s key considerations and conclusions, together with the Scottish Government’s response, which, of course, has changed even today.
In evidence, many witnesses told us that they oppose a building safety levy—particularly house builders and their representative bodies, who suggested that it would negatively affect Scotland’s housing market. They highlighted significant impacts on rural development, small to medium-sized enterprises, the build-to-rent sector and their ability to build affordable homes. I am pleased that the minister has today gone some way towards addressing the concerns at least of SMEs.
Those who are supportive of the levy consider that it is a fiscal necessity for the remediation of cladding defects, as having a levy would be better than placing the full costs of remediation on affected home owners or paying for them through general taxation.
On balance, the committee was persuaded by evidence that the levy would have a macroeconomic effect on the Scottish housing market, although more data is needed to identify exact impacts. The committee recommended that the Scottish Government undertake a sensitivity analysis to assess in more detail the levy’s potential impact on the housing market, particularly on rural sites and on small and medium-sized developers. We asked for the results of that analysis to be published in time to inform Government decisions on setting levy rates and, where applicable, any reliefs through secondary legislation.
We also sought an updated business regulatory impact assessment, alongside the subordinate legislation, to set out an explanation of how the Government has taken those findings into account. Although the Scottish Government has committed to providing an updated BRIA, it is unclear whether our recommendation to carry out a sensitivity analysis has been accepted. That was a key recommendation underpinning the committee’s findings, and we urge the minister to clarify in his closing speech that that much-needed piece of work will be undertaken, as requested.
The bill would exempt from the levy all residential developments on Scotland’s islands, and there is broad support for that measure. The committee also believes that there is a strong case to extend the exemption to remote rural areas, and we asked the Government to undertake work on developing an appropriate definition of and exemption for those remote rural areas. The Government now plans to extend the exemption to areas that currently receive 100 per cent relief on non-domestic rates.
Some witnesses also made the case for exempting the build-to-rent sector from the levy—a matter that the minister touched on earlier. Although committee members have concerns about the fragility of the build-to-rent sector, on balance we felt that such an exclusion would significantly limit the levy’s tax base and agreed that the levy should apply to that sector.
The bill exempts any housing for which construction funding has been provided under the Scottish Government’s affordable housing supply programme. The committee heard a mix of views regarding that exemption, with some witnesses arguing that removing affordable housing from the tax base places a disproportionate burden on private homes. Others, such as local authorities, suggest that the exemption does not go far enough and should be extended to cover all affordable housing developments, not just those that are funded through the Scottish Government’s programme.
The committee asked the Scottish Government to consider, as part of the sensitivity analysis that we requested, the potential effect of the levy on the delivery of much-needed affordable housing across Scotland. It would be helpful if the minister could confirm in closing whether he accepts that recommendation, as his response on that has been, again, unclear.
The Government originally planned to introduce the levy from 1 April 2027, just over a year after the bill would pass if agreed to by Parliament. In evidence, there were concerns that that timeline would not provide house builders with sufficient time to properly prepare for the levy’s implementation, particularly as key details such as levy rates and transitional arrangements would be set out only in secondary legislation. In evidence, the minister announced that levy implementation would be deferred by one year, to 1 April 2028, and advised that indicative levy rates would be set out in June this year, as he touched on earlier today. The committee welcomes the decision to delay the levy’s implementation and believes that the new timescale provides the housing industry with sufficient time to prepare for its introduction.
Section 13 of the bill requires the proceeds of the levy to be used
“for the purposes of improving the safety of persons in or about buildings in Scotland.”
However, the Scottish ministers’ current intention is for the levy to support the cladding remediation programme. We were told in evidence that building construction quality scandals have tended to occur every 10 to 15 years and that the broad wording in the bill could lead to a permanent levy that funds the remediation of any building safety issue that arises. Witnesses said that the consultation processes focused exclusively on cladding remediation rather than broader safety matters. Certainly, that should be the case.
The committee sees merit in those arguments and in recommendations that are aimed at ensuring that the levy does not continue indefinitely without proper checks and balances. The proposals should also provide much-needed reassurance to the industry that the levy will not become a permanent house-building tax.
Our recommendations include asking the Government to further consider adding a restriction to ensure that the bill pertains exclusively to cladding remediation, which I am pleased that the minister agreed to. A sunset clause should be added to the bill, which would provide an opportunity after 15 years to robustly review how the levy is operating and for Parliament to decide whether it should continue. Although the minister is not in favour of a sunset clause, he said that he will consider including a clear date for review by strengthening the bill’s reporting provisions. We heard a few minutes ago that that date will be every three years.
The bill’s financial memorandum suggests that the levy seeks to raise £30 million a year as one of the revenue streams for the Scottish cladding remediation programme. That is the amount in
“Barnett consequentials that the Scottish Government might have received had the UK Government England-only levy been extended to Scotland.”
Evidence that the committee took suggests that that figure is optimistic, given uncertainties around the potential impacts of, and behaviours arising from, the levy. We asked that the figure be reviewed once the sensitivity analysis that is recommended in our report has been carried out.
Concerns were expressed that the data set that the Government used to calculate the costs of cladding remediation is not as robust as it should be and that the financial data in the FM uses “estimates of estimates”. The minister told us that the Scottish Government
“will not know the full scale of remediation that is required until all the assessments are done”.—[Official Report, Finance and Public Administration Committee, 18 November 2025; c 53.]
The committee finds it concerning that more accurate cost estimates are not yet available. The Government’s response commits it to reviewing that as part of wider work to consider impacts in relation to levy rate setting.
The Scottish Government’s response is helpful in further informing this stage 1 debate. Nevertheless, the committee believes that introducing the levy carries significant risk and that policy design has not been sufficiently focused on developing a good, well-structured and sustainable levy. As previously mentioned, I urge the minister to clarify in his closing remarks his intentions regarding the sensitivity analysis that the committee has requested.
15:17
Nobody could possibly doubt the far-reaching implications of the most appalling human tragedy at Grenfell tower in 2017, nor the importance of ensuring that nothing like that can ever happen again. In that spirit, I say to the minister that, irrespective of the bill, the Scottish Government has an obligation to answer the question that Mr Hoy and Mr Kerr posed to him about exactly how much of the £97.1 million has been spent, because we are not getting the true facts about that.
It is absolutely right that measures be put in place to improve building standards, especially so that the people who are engaged in the new-build sector fully recognise and adhere to their responsibilities. It is also right that there be a legislative process to secure that for the future. However, the question that we, as parliamentarians, face in this stage 1 debate is whether the bill is the right procedure. For Conservative members and, I suspect, several other colleagues across the parties, there are serious doubts, not because improving building standards is not the right thing to do but because the evidence that was taken at stage 1 points to several important failings in the bill.
I agree with Liz Smith in that I am not wildly enthusiastic about the package, but does she accept that Westminster has put us in a corner and we do not have a lot of room for manoeuvre?
No, I do not entirely accept that. The bill is a specific, Scotland-centred bill and we, as Scottish parliamentarians, have to take a decision on its merits. That is the basis on which I am making these points.
Along with my colleagues on the Finance and Public Administration Committee, I listened very carefully to witnesses, who provided us with extensive written and oral evidence across three different evidence sessions before Christmas. As set out in the committee’s report, there was unanimous concern—including from Mr Mason—about several key aspects of the bill and the negative externalities that are likely to result. As colleagues know, it is unusual for a committee not to fully endorse the general principles of a bill. However, on this occasion, it has not endorsed them, and for good reason.
As the convener said, the major issue is the likely impact on the housing market, which, as we all know, has already been facing significant challenges for quite some time. The most significant concern among witnesses and members of the committee was the fact that the bill could reduce house-building capacity, because it would make certain sites unviable and thereby have a detrimental effect on the ability to deliver much-needed affordable housing. Homes for Scotland estimated that the levy would probably add around £3,500 to the cost of building a new home, and Bancon Homes told us that it would have an impact of up to 20 per cent on its profit margins. Those are not inconsiderable fiscal effects.
Different but nonetheless related are the potential effects on rural Scotland, where depopulation is already a significant problem. I have heard the minister’s concerns about some of the rurality issues, but several factors have already combined to create a very complex situation for rural housing. House prices are often high in relation to local incomes in rural areas, and there is a shortage of housing that is suitable for families, which means, sadly, that too many families choose to move away. The combination of that, the weak infrastructure that we find in rural areas in relation to accessibility of transport and the internet and the complexities in the planning process means that we encounter major challenges. Scottish Land & Estates told us that the cost of delivering rural housing could be almost double that of mainstream housing. That must be a serious concern. That is on top of a lot of the other issues that affect rural areas, such as the farm tax, national insurance charges and various other aspects of tourism and hospitality. That whole combination is a very serious matter for the rural sector.
Although there appeared, in some quarters, to be an understanding of the problem, particularly in relation to the islands issue, part of it is that we do not have a clear definition of what rurality is, and there are accompanying inconsistencies. I hope that the minister means what he said today and in committee, which is that he is prepared to lodge some amendments.
There is likely to be a disproportionate effect on smaller developers, owing to the fact that they will inevitably find it more difficult to absorb the necessary costs. The Scottish Property Federation was extremely clear about that. There was also concern that the bill could have a detrimental impact on those who want to build over a long period of time, such as the build-to-rent sector, as the financial returns there take longer to be realised.
Much of the debate among stakeholders was about how to address the issue of the polluter-pays principle. They worry that those who have acted responsibly will end up footing the bill for the levy. I think that it is worse than that, because some responsible builders will go well beyond the basic safety regulations, and they are the ones who will have to pick up the tab, whereas those who have not been responsible can, to some extent, get away with it.
The committee is unanimously concerned, for very good reasons, about some of the macroeconomic effects of the bill. Once again, I think that the Parliament is faced with a Scottish Government bill that, although well intentioned, nonetheless has very significant problems. On that basis, the Conservatives cannot support it at stage 1.
15:24
It is no small thing for a committee to fail to support a bill at stage 1. It happens very rarely in this place, but in this case it is entirely justified. The Building Safety Levy (Scotland) Bill contains proposals that are, in my view and, it seems, in many others’ view, disproportionate and vague and, most important, risk reducing the supply of new homes in Scotland, exacerbating the Government-declared housing emergency. For those reasons, Labour will not be supporting the bill at stage 1 today.
I would like some clarification from Mark Griffin. Is it the Labour Party’s position that it does not support taking forward a levy in Scotland in the same way as its Government down south is taking one forward? If it is not in favour of taking forward a levy in Scotland, where does it propose that we find the additional £360 million to £450 million that is needed to support the programme?
Mark Griffin, I will give you the time back.
I challenge the assertion that the Scottish Government is taking forward a levy in the same way as the UK Government is. It is not the same policy. I was going to come on to this later in my speech, but I will say now that I support the principle of a levy. However, how this particular levy has been designed and applied, the vagueness, the uncertainty and the risk of exacerbating the housing emergency means that we cannot support it in the form in which the Government has presented it.
Everyone in the chamber agrees on the importance of removing potentially life-threatening cladding from our homes. Nearly a decade after Grenfell, families still live in fear of the next devastating fire that could cost lives and destroy homes. For many residents, that is a daily reality that affects their safety, mental wellbeing and financial security. We are united in our determination to prevent another tragedy.
However, although remediation has progressed elsewhere in the UK, Scotland continues to lag far behind, with a tiny number of homes having had dangerous cladding removed. It has taken the Government almost a decade to begin addressing the problem, while thousands of buildings in England and Wales have had dangerous cladding removed. That is an absolutely shocking dereliction of duty that has left too many people living in unacceptable conditions for far too long.
The problem is not only the pace of the Scottish Government’s response but the quality of the proposals that are before the Parliament. The bill seeks to ensure that those who contributed to unsafe cladding also contribute to its removal. We support that aim. However, during committee scrutiny, the Government failed to provide the detail that was needed to support the evidence base for that approach or to demonstrate that it would operate fairly and effectively in practice. We still do not have clarity about how many buildings are affected, which organisations might be required to contribute, what the levy will fund or how long it will be in place. Instead, we have been given little more than a blind assurance that it probably will not harm house building. That is not good enough when we are talking about a bill that will introduce a levy that could fundamentally impact the housing sector in Scotland.
We accept that organisations profited from the installation of dangerous cladding and that they should bear the cost of putting matters right.
Mark Griffin says that there is no understanding of the impact on the market; I would argue that there is. Will he explain what analysis of the impact on the market—different from what we have undertaken—has been undertaken by the UK Government? Our numbers are broadly similar to the numbers that it has.
That is a different housing market, and it is an area where the Government has not declared a housing emergency. Ivan McKee’s Government has declared a housing emergency in Scotland. We are in a materially different place from the rest of the UK.
The committee could not get clarity from the Government and has asked for updated figures and a sensitivity analysis. Homes for Scotland wrote to the minister and the committee last night to challenge the Government’s figures, saying that the figures that were used to calculate the value of the new-build housing market in Scotland were wildly inaccurate and overestimated by 44 per cent. Those are figures from industry experts, who I would listen to before I listened to the Government, which has sleepwalked into the housing emergency in which we find ourselves.
As I said, we accept the principle that organisations have profited from the installation of dangerous cladding, and it is right that they should bear the cost of putting it right. That is a question of fairness and restitution, and I think that it commands broad support across the Parliament. However, the bill does not deliver that in a clear or credible way. The polluter-pays principle is sound, but there is no guarantee through the bill that the polluter would actually pay. Many organisations involved in the installation of dangerous cladding are not covered by the bill; meanwhile, some companies that had no involvement at all will be liable for that burden. That is a disproportionate burden on the wrong businesses, which undermines confidence in the levy’s fairness.
Analysis also suggests that the levy could add around £3,500 per home and would have a disproportionate impact in rural areas. The Government needs to address that.
We are not opposed to a mechanism that makes those who profited from unsafe cladding help to fix it. However, there is not enough evidence that the levy will achieve that aim. A levy without a clear evidence base or a coherent strategy is a bad levy. Therefore, we echo the committee’s finding that significant further work is required, particularly in relation to the impact on the house-building industry in the context of the housing emergency. For those reasons, we will not support the bill today. If it passes at stage 1, we will seek substantial amendments, but we cannot vote for it in its current form.
15:30
I welcome the opportunity to contribute to the stage 1 debate on the Building Safety Levy (Scotland) Bill. I am aware of the issues, having been involved in parliamentary scrutiny in relation to cladding remediation, including the work that led to the Housing (Cladding Remediation) (Scotland) Act 2024, which, in turn, informed the bill that is before us.
Let me be clear at the outset: the Scottish Greens support the principles of a Scottish building safety levy—but it is cautious support. We recognise the moral and political imperative to address the cladding scandal and to ensure that the cost of putting right historical failures in building safety does not fall on the shoulders of residents who did nothing wrong. For years, countless people have been living in unsafe homes, surrounded by highly combustible materials, trapped in buildings that they know are dangerous but that they cannot afford to fix. The situation did not arise by accident: it is the product of a house-building system that has prioritised profitability over safety, enabled by a deregulation agenda that has consistently put corporate interests ahead of people’s lives.
The starkest illustration of where that can lead is the Grenfell tower fire. At least 72 people lost their lives because cost-cutting decisions were made. A less safe, more combustible façade was chosen because it was cheaper. That must never be forgotten in our deliberations today. Across the UK, house builders and those involved in the construction process have put lives at risk for decades. We must learn from those failures. We must properly fund cladding remediation, bring an end to the emotional toll of waking watches and give residents the peace of mind that their homes are finally safe.
Those most responsible for the scandal must pay to fix the mess that they created. While house builders are part of the picture, they are not the only ones: contractors, architects, suppliers and others have also played a role. The stage 1 report reflects evidence from Miller Homes and Bancon Homes that made clear the fact that responsibility is shared.
Although I recognise the points that the minister made about the constraints of the bill, I would welcome clarity from the Scottish Government on how it intends to address the gap in Scots law that was partly closed in England by the URS Corporation v BDW Trading case, such that responsibility for historical building defects rests with those who caused them instead of falling to the public purse or to residents.
We also recognise that the levy, as it is currently designed, would benefit from further fine tuning and that there are legitimate concerns about targeting and fairness. In particular, as others have said, we must ensure that the levy does not undermine the viability of house building in remote and rural areas, such as the Highlands and Islands, or place disproportionate burdens on community-led and non-profit housing initiatives that were never part of the scandal.
It is good to hear the minister’s comments that the Government will lodge amendments to ensure fairness and to remove the unintended impacts. I look forward to seeing other amendments that the Government has committed to lodging and to the sensitivity analysis that was recommended by the Finance and Public Administration Committee. It matters that we get this right.
Finally, I caution against binary thinking. Safety and viability should not be set up as opposing forces. It must be possible to build homes that are safe, affordable and viable while funding the urgent cladding remediation work that residents so desperately need.
In short, we cautiously support the bill at stage 1. We recognise the necessity of action, we acknowledge the concerns that stakeholders have raised and we will work constructively to improve the bill. However, I have far less sympathy for the profit-seeking opposition of the large and highly profitable house-building companies that would prefer the costs of their past decisions to be borne instead by residents or the public purse. The Parliament must choose to stand with residents, with safety and with justice.
I call Willie Rennie to open on behalf of the Scottish Liberal Democrats. You have a generous six minutes, Mr Rennie.
15:35
The Government has put us in a hellish position today. Who on earth would want to vote against a building safety levy to deal with the many homes that are affected by the issue that arose from Grenfell and the thousands of people across Scotland who live a daily nightmare, wondering whether their building is safe? Who would want to vote against that? However, the circumstances that have led to the difficult decision that we all face today are of the Government’s own making. The minister was unable to say how much money has been spent of the money that has been allocated to the issue through the Barnett formula.
Will the member give way?
Not just now.
The minister knows the answer to that. He knows that a pitifully small amount of money has been spent on dealing with the issue. He knows that the Government has bungled the cladding remediation process from the very beginning by trying to do something better than the rest of the UK but ending up doing something much more complex and much slower. As a result of that, people are suffering every day. Given that the Government cannot even spend the money that it already has, why on earth are we asking the sector to pay more when it does not have any confidence in the process that the Government has established?
The single building assessment is supposed to be superior, but it is far inferior to what we had before. The Government introduced legislation on the leasehold-freehold arrangement in Scotland extremely late in the day. It knew that it had to address that at the beginning, and it could have done something about it years ago, but it has been sluggish to act. All of that gives us no confidence that the Government is capable of remediating the cladding on people’s homes.
The second issue—which, again, is of the Government’s own making—is that it has shattered the confidence of the housing sector over a number of years through utterly reckless policies. As a result, the capacity in the system is much reduced, along with the confidence of the sector. Adding another tax on top of all the other measures that the Government is bringing in will have practical consequences. There are so many people in my constituency who are desperate for a home but cannot get one. The danger is that the bill will make the situation worse, with the result that more people who desperately need a home will not get one.
I have a lot of sympathy with what the member has said so far. However, I point out to him that the residential property developer tax is already in place in the rest of the UK. The Government must be able to reflect on the macroeconomic environment of the UK, which has been very poor. Surely that, too, has played into the operating environment for builders.
I have no doubt about that, but there are particular measures that have been taken in Scotland that have made the situation worse. Michelle Thomson knows that—she knows that some of the measures that the Government brought in and has now rescinded have had a massive impact on the confidence of the sector. The fact that it has been necessary to bring in exemptions from rent controls for build-to-rent properties is a clear indication that the Government knew that concern about rent controls was having an impact on investment in the sector. First and foremost, I want investment, because I want homes to be built for the people I represent.
I also worry about the SME sector, which is facing particular costs at the moment. Construction costs are going through the roof, and there are skills shortages. All those issues have had a dramatic impact on the confidence of the sector, and the cumulative impact of a number of different measures is such that it is really difficult for us to decide how to vote. As I said, we face a hellish dilemma. The minister should be more frank about the situation that he has put us in. If, instead of hiding how little money has been spent on cladding and remediation, he was up front and honest with us about the mistakes that have been made, that might help us to persuade others that the remediation process will be managed properly at last, after years of failure.
The fact that, as has been said repeatedly, the committee could not bring itself to endorse the bill, although it has so many SNP members on it, is a clear indication of the bill’s weaknesses. Its scope is so open-ended that it could cover more than the cladding issue. The fact that it could last for ever and be a permanent tax with no sunset clause is also of deep concern. It is also clear that, because of the nature of the sector in Scotland, with a higher proportion of social housing, the private sector will bear a greater burden of the tax than it would elsewhere in the United Kingdom.
We will not support the bill at this stage. That does not mean that we are against having some kind of levy at some point, but the Government needs to pause and reflect on the confidence in the sector and its management of the cladding remediation process. It does not mean that we will not support the bill later, if efforts are made to fix the issue and if significant amendments are made—particularly in reference to a sensitivity analysis, which we heard about in Kenny Gibson’s contribution and which is particularly important.
The bill is weak because of the Government’s policies and management over a number of years. I want to be able to give the people who live in the properties confidence that there is a plan and that it will be delivered, but I do not have that confidence just now, which is why we will not support the bill.
15:41
I add my voice in support of those who were affected by Grenfell and its resultant impact. We cannot ever forget the people who are behind all our discussions today. I agree that it is a pity that the Scottish Government has been put in this position by the UK Government. In fairness to the UK Government, it has consistently made clear that its preference was for a UK-wide scheme.
Today’s debate is about the Finance and Public Administration Committee’s stage 1 report, and I want to reflect on my views on why the committee arrived at some of the recommendations that it did.
The unanimous decision not to support the principles of the bill at stage 1 is highly unusual. Put simply, there is still too much detail to be fleshed out. Some might claim that industry simply does not want to pay more tax—I am sure that that is true—but that does not mean to say that the bill will not have an impact. The concerns that are being expressed can certainly not be soothed until industry has more detail.
It was therefore difficult to take a view on a principled basis, beyond accepting the principle that something must be done and that the something should be a tax to ameliorate cladding issues. However, the tax is not based on the polluter-pays principle. As our report says, there is
“a lack of detail provided in relation to the administrative systems and process, calculation method, and rates.”
That is quite the list.
I would like to pick out a few areas for further examination, the first of which is the housing market. In my time here, I have been consistent in calling for house builders to be supported and for more money to be spent on house building, not just because we need more homes, which we do, but because of the multiplier effects in a boost to supply chains, improved local infrastructure and increased economic activity.
I agree with Homes for Scotland, which notes that, despite plans to exclude affordable housing, the current proposals do not reflect enough on how developments are structured. Most developers use private housing to subsidise affordable housing, so if the overall business model does not stack, there will be an impact on affordable housing. I fully support the committee’s recommendation for a sensitivity analysis that can examine that and I seek guidance, in common with the convener, about whether that will be carried out by the Government.
There have been ample warnings that the additional cost of the tax could be passed on to purchasers. To be honest, it is slightly naive to consider that house builders will manage their margins by simply offering less for land. That is possible in some areas where the demand for land is low, but where the demand is high, it is just not likely.
Another concern is that the impacts will be felt mostly by our Scottish SME house builders, who play a vital role in getting housing to market, while the bigger UK-wide companies can pick and choose as they see fit. The last thing that we need is an overreliance on those large UK-wide companies because of that.
I will further explore the polluter-pays principle. The committee is right to note in its report that the tax cannot be considered to be based on the polluter-pays principle and it is right to ask the Scottish Government to consider
“legal options that would enable housebuilders to seek contributions for remediation work from others in the sector.”
I was surprised and, I must say, a little disappointed that the minister, in his response to the committee, did not fully address the issue of the Supreme Court interpreting English legislation, including the Building Safety Act 2022 and the Defective Premises Act 1972, neither of which applies in Scotland. Remedies for Scottish house builders rely entirely on the Prescription and Limitation (Scotland) Act 1973, which, although it has been amended, will not provide the same legal remedies as are found elsewhere in the UK, unless this Parliament legislates to amend it further. I wonder whether the minister will, in his closing remarks, give some thought to whether that will be considered.
Another concern that I raised during our evidence sessions was in connection with build to rent. I think that the Scottish Property Federation is right to note that the business model often operates on a phased cash-flow basis. A large site that is being developed for build to rent will be charged a one-off levy, whereas new housing estates will appear over several years, thus spreading out the tax. The issue is not as simple as amortising a liability over several years.
In his remarks, the minister did not refer to the letter that was sent yesterday by Homes for Scotland and has been mentioned by another speaker. That letter picks up on the fundamental point that the BRIA valued the new-build housing market at around £4.6 billion. Homes for Scotland thinks that that overstates the value by about £1.4 billion and therefore skews all the figures—I think that someone referred to estimates of estimates.
I have a final, brief point about transition planning, about which I think we also need more detail.
I will vote for the bill at stage 1, but I am looking forward to the considerable amount of work that is still to be done and I will play my part by lodging amendments at stage 2.
15:46
Improving building safety is not optional. The tragedy at Grenfell tower exposed catastrophic failures in regulation, oversight and accountability, and it is right that Governments should accept responsibility for ensuring that people are safe in their own homes.
However, good intentions do not give this Parliament or this Government a free pass. The duty before us as parliamentarians is not only to improve safety but to ensure that the policies that we introduce here are coherent and fair and do not cause further harm, particularly to vital sectors such as house building and construction, which we will need if we are to address a deepening housing emergency.
I do not for a second believe that anyone here doubts the importance of building safety. Of course it matters, but the real question is whether the levy, in its current form, would be the right mechanism to fund cladding remediation or whether it threatens to compound one failure with another. Homes for Scotland, the Scottish Property Federation and others have been absolutely clear in their evidence that the levy would not simply be absorbed by developers but would hit viability, could stall projects and could, in some cases, stop development entirely.
We have been here before. Willie Rennie referred to the problems caused by rent controls, and I fear that the exact same thing will happen again. At a time when supply is already lagging dangerously behind demand and when construction costs are soaring, private investment is fragile and confidence in the pipeline is weak, the levy, if it goes through as it is, will act as a further brake on the delivery of housing supply.
I therefore directly ask the minister whether we want to build fewer homes, deliver fewer affordable homes through planning obligations and support fewer jobs in the construction supply chain. That is the gamble that the Scottish Government is taking, and I believe that it is a reckless one.
In reality, the levy model is very similar to the one that was introduced in the rest of the UK. Does the member accept my argument that it would have been better to share the costs far more widely—for example, by raising corporation tax?
We have had exchanges in the chamber up to this point, but the Scottish Government cannot tell us how much money it has already spent out of the £97.3 million for cladding remediation. We do not know what the levy is for or why people are paying into the fund, because we do not know how much money the Government has already spent on remediation. I would rather focus on that first and look at other alternatives thereafter.
I turn to what I consider to be the most damning aspect of the debate, which is the Scottish Government’s handling of cladding remediation. It is now nearly eight and a half years since Grenfell and there is still no comprehensive, consistent or fully funded remediation plan in place. Instead, we have seen confusion, contradiction and chaos, and the only people who are paying the price are home owners.
I have brought with me today some letters that expose the failings of the Scottish Government quite starkly. A constituent contacted me when they had tried to sell their flat, only to be told by the Scottish Government cladding remediation directorate that issues that they had with cladding would render the property effectively unsaleable. In a letter from the Scottish Government dated October 2025, they were informed that funding would be dependent on the findings of a single building assessment and that some works that were identified could be deemed the home owners’ responsibility, including those that were not considered a live fire safety risk.
That is where it gets interesting, because my constituent’s neighbour in the same building had received a letter the year before, in November 2024, that stated something entirely different. That letter said that, where the developer could not be identified or was no longer operating, the Scottish Government would use public funds to undertake assessments and carry out works that were needed to eliminate or mitigate any risk to human life associated with the external wall cladding system.
Which is it? Those two neighbours in the same building had different outcomes and received two entirely different messages about liability, funding and responsibility. That is not a minor administrative error; it is a complete failure of governance by the SNP. I ask the minister why the Scottish Government changed the content of the letters that it sends out to home owners who are impacted. How many people have potentially been misled about the support that they should expect, given that their properties have been impacted by cladding?
Residents in general, not excluding my constituents, are still living in fear and anxiety because properties remain unsaleable and costs continue to be pushed on to home owners who did absolutely nothing wrong—and, even now, the Government cannot provide consistent answers to people whose lives have been put on hold. It is simply not credible for ministers to argue that developers today should be made to pay for historical regulatory failures, particularly when the Government has had almost a decade to act and has failed to do so.
I know that I am running out of time, Deputy Presiding Officer. Until ministers can demonstrate competence, consistency and fairness in how cladding remediation should be handled, they have no moral authority, in my view, to impose new levies that could further damage our housing market and supply. The approach is failing home owners, it is failing builders and it is failing Scotland, and until it is fixed, I will not play any part in it.
I advise members that we have some time in hand.
15:53
I know that colleagues across the chamber are united in our understanding and our resolve with regard to the reason for this bill being before Parliament today. The tragic series of events at Grenfell in 2017 must never be forgotten and must never be witnessed again.
In the years since then, the Scottish Government has been unwavering in its commitment to do what is necessary and right to fully assess and address the remediation of buildings across Scotland that are fitted with unsafe cladding.
Will the member take an intervention?
I must ask Mr Hoy to let me make a wee bit of progress.
I thank members of the Finance and Public Administration Committee for their careful and detailed consideration, which has brought us to this point today. The committee has had to consider a multitude of complex, interwoven and sometimes competing factors, and to do so in what remains a very challenging context, given the clear need to increase housing supply in light of Scotland’s housing emergency and the on-going challenges facing the sector, which were exacerbated by Brexit, the pandemic and other UK-wide and global events affecting its bottom lines and supply chains.
It is important that we acknowledge the impact of the situation on many people’s lives. It has been a stressful and concerning time for home owners and residents across Scotland who are living in buildings with potentially unsafe cladding.
I am sure that many of my colleagues will have heard about the difficulties that their constituents have been facing. In my Rutherglen constituency, I have been supporting constituents who have faced a variety of issues with their properties. I will give just a few examples. People have been seeking information and support about external wall system fire review forms—known as EWS1 forms—and single building assessments. Others have come to me with issues that they have experienced in communicating with their building’s original developer or their factor. I have heard from landlords who are worried about the on-going affordability of maintaining their properties as insurance costs have spiralled and from tenants who are worried about the safety of their homes and the sustainability of their tenancies.
Other people have related issues with properties being unmortgageable, which causes problems if circumstances lead to their home having to be put up for sale, including in cases of probate. Some of my constituents have had to seek letters of comfort to move forward, because they have been caught in that period in which assessments have been completed but the work has not yet been scheduled or completed, and their life circumstances have meant that they have had to move on.
Based on current contact, and my contact with the previous housing minister and other bodies on behalf of my constituents, it has always been clear to me that the Scottish Government is committed to acting to protect home owners and residents, and it has been clear to me that the safety of residents and home owners is the ultimate and utmost priority of the Scottish Government, as it absolutely must be.
However, I completely understand and appreciate the frustrations that have been expressed to me about how long people have been living with stress, worry and uncertainty surrounding the issue. There is a clear need for legislation so that we can do what is right and necessary to address the challenge of fixing buildings that are affected by unsafe cladding.
The cost of cladding remediation has, completely understandably, always been a cause of concern for the residents who have been in touch with me, so it is imperative that we put in place funding arrangements that ensure that those costs do not fall directly on affected home owners—and, indeed, are not passed on indirectly to their tenants, if applicable. The costs of remediation are considerable, with the latest estimates indicating that we could be looking at a cost of £1.7 billion over a 15-year period.
Does the member agree that the sector and the Parliament could have more confidence in the Government as it introduces the bill if it could tell us how much of the £97.1 million it has already spent, how it has been spent and how it will work towards what we all want—to make Scotland’s housing stock safe?
Craig Hoy has raised an important point. As I have mentioned, some remediation has taken place in my constituency, but at this point in time, for the people who are affected, we have to move forward, get remediation and make those homes safe.
The scale of the challenge is significant, and so is the progress that has been made so far through the collective efforts of developers, local authorities, social landlords and Government. Colleagues will have received correspondence and briefings from stakeholders, including developers, over the past weeks and months.
The continued co-operation of developers, who have accepted responsibility for the assessment of their buildings and any required mitigation and remediation, has been very welcome. They share our determination to keep people safe, and the levy outlined in the general principles of the bill will ensure that they make a fair contribution towards doing so, just as they will in England.
As the bill has been developed, it has been crucial to remain mindful of the need for new housing in Scotland, the importance of avoiding any unintended or disproportionate impacts on the new-housing sector and the viability of much-needed new developments. With the addition of exemptions for areas where there are more acute housing pressures and the levy-free allowance to protect small and medium-sized developers, I am pleased that the Scottish Government has reached a point at which it shares the UK Government’s assessment of its equivalent legislation—that the levy is not expected to have any significant macroeconomic impacts and that any negative impacts on the housing supply will be small.
Today, we are being asked to agree to the general principles of the bill at stage 1, and there will naturally be further discussions, refinements and amendments as it continues to move through Parliament. I am sure that the cabinet secretary will listen very carefully to the points that members make today.
I am pleased to support the general principles of the bill today. I look forward to its further development and the reassurance and peace of mind that it will provide to my constituents and to everyone else who has been affected by this issue.
16:00
What this debate is about is not simply taxation. It is not simply about the role of the state and of public finance. It is about how we value human life, public health and community safety.
It is about taking action so that never again do we witness the iniquitous, the catastrophic, the tragic events of 14 June 2017, which claimed the lives of 72 people at Grenfell tower. It is also about learning the lessons and heeding the findings from the public inquiry that followed, which concluded that there was “systematic dishonesty”, with its roots in a culture of deregulation and profiteering.
Which is why I have some sympathy with those who say that those directly responsible for unsafe cladding should meet the costs of cladding remediation, and that, under this proposal, the scrupulous are having to pay for the unscrupulous. Rather than house builders having to pay and, in turn, house buyers, for the Institute of Chartered Accountants of Scotland warns that
“house buyers will ultimately fund the levy upon purchasing a property”—
and I might add renters, because the costs will be passed on to tenants, too—what about those involved in the supply chain? What about those who researched, developed and tested this cladding? What about those who manufactured it? Those who fitted it? Are they not liable? And what about the property speculators, the venture capitalists, the pension and insurance fund asset managers, who have made millions out of these buildings? Are they not liable?
But there is something else for the Government to answer for. On 17 December, at this Parliament’s Public Audit Committee, the Auditor General gave evidence on the Scottish Government’s consolidated accounts, in which it was revealed that one of the outstanding areas of this Government’s underspend was cladding remediation. Last year, £35 million was budgeted for cladding remediation, but, scandalously, only £6 million was spent.
The Government has got expert advisory groups, ministerial working groups, cladding programme stakeholder groups—there is even a Scottish Government cladding remediation directorate. But, by quarter 2 of 2025—eight years after Grenfell—while in England nearly 2,500 cladding remediation projects had either started or been completed, in Scotland only three single building assessments had taken place.
Residents tell me of factors hiking up fees, of insurers hiking up premiums, of structural engineers and of single building assessments taking years. They tell me of work still to be put out to tender and of—and I quote—
“utter frustration … while the government drags this out”.
And then the minister comes along to the Finance and Public Administration Committee to announce that the levy we are being asked to begin to legislate for today—originally to be introduced from April 2027—will not now come into force until 2028.
Meanwhile, we have people, including children, the elderly, the infirm, the frail, the disabled—those who were disproportionately among the fatalities at Grenfell tower—going to bed every night in tower blocks across Scotland that are demonstrably unsafe and are a fire risk. And they are being met with silence and with inaction. They are missing, ignored, shut out, nowhere to be seen on these Scottish Government advisory bodies. If ever there was an emergency crying out for political leadership, this is it.
And do not tell us, and do not tell those residents, that it is too complicated. A duty of care is not a legal complication—it is a moral obligation. Even the minister’s own expert advisory group on the levy, in sheer frustration, opines that we do not yet know how many units the levy will be charged on, how long the levy will run for, what the full cost of cladding remediation work will be or even who will be paying it.
Let me finish with the words of Peter Drummond, from the Royal Incorporation of Architects in Scotland. In his evidence to Parliament on this levy, he said:
“Only one thing will drive change, and that is regulatory pressure ... Regulation is what protects the public. There is not a building regulation in this country that is not written with the blood and tears of people who lived in substandard buildings.”—[Official Report, Finance and Public Administration Committee, 7 October 2025; c 28.]
I reflect on what has happened in my lifetime—the blood and the tears of the victims and their relatives of Ronan Point in the 60s, of Summerland in the 70s, of Garnock Court in the 90s, of Grenfell tower in 2017 and of Le Constellation in Switzerland just last week. Those tragedies and those histories teach us that Peter Drummond is right.
So, we will need to act, and the Government will need to act, with a much greater sense of urgency, with a much greater sense of transparency, with a much greater sense of social and moral purpose. The Government will need to act, and it must back that up with active investment to make building safety and lives—not a building safety levy—a matter of political priority.
The money is there. Stop delaying it. Get on with the job.
16:06
I am happy to speak in support of the Building Safety Levy (Scotland) Bill. I do so in recognition of the Scottish Government’s clear commitment to addressing the legacy of unsafe cladding—a legacy that it has, of course, inherited. I also frame my remarks in the context of recognising, as Mr Leonard has just laid out, the absolute necessity of ensuring that people are safe in their homes. That is an important starting principle.
At its heart, the bill is about fairness and responsibility. It is about ensuring that the costs of remediating serious building defects do not fall solely on home owners who had no role in the design, materials or construction of their buildings. That is an important principle, and it is the right starting point for the bill.
I want to ask Jamie Hepburn about the content of Mr Leonard’s excellent speech. Mr Leonard set out the evidence that has been provided by the Auditor General for Scotland about the extent of the underspend. Does Mr Hepburn agree that that money would be much better spent in addressing these problems to sort this urgent issue?
Of course that money should be spent on doing that. I heard the minister very clearly say that the commitment is to spend that money on doing just that.
When?
Of course we want to do it as soon as possible, but the commitment is—it was a very clear commitment from the minister; I was certainly listening, but I do not know whether other members were—that that money will be spent. We know that the amount of money that has been passed on as a result of the UK Government investment does not even touch the surface of the overall cost. The scale of the challenge that we face is substantial.
Mr Leonard is shaking his head, but the minister’s response to the Finance and Public Administration Committee’s stage 1 report was very clear. The current estimates show that Scotland’s cladding remediation programme could cost in excess of £1.7 billion over a 15-year period. That represents, by any reasonable measure—I presume that we are all reasonable people in this place—a significant national undertaking that could not reasonably be met through the public purse alone, not least in the context of the point that I have just made, which is that the funding that has been provided by the UK Government is not anything close to £1.7 billion.
Notwithstanding that, I go back to the point that the minister has been clear that all that money will be spent to that purpose.
Of the £97 million that has been allocated, last year’s quarter 3 report on the cladding remediation programme noted that a total of £14.2 million has been spent—that is the figure that has been asked for today. The rest of that money is available. Does the member recognise that the rate-limiting step—the thing that is holding us back—is not the immediate availability of capital to do the work but the will of the Government to get it spent?
I have made the point and I will make it again: I heard clearly from the minister that the money will be spent. Mr Marra makes the point that I am trying to make, which is that, even in the context of the £97 million that we have been allocated, it does not come close to meeting the entirety of the challenge that we face. Therein lies why I think that the building safety levy is necessary.
Mr Leonard was quite right to say, and I agree with him, that the debate is not just about taxation or the balance of the role between the private and public sectors. I hope that he would accept that it is also a debate about those things; they are part of the equation. The bill—I think reasonably—seeks to introduce a targeted levy for certain new residential developments that is broadly aligned with the existing levy arrangements that are already in place in England, as Mr Mason and others pointed out. The levy intends to raise around £30 million per year. In the context of the scale of the challenge that I have just spoken about, that will not solve the problem on its own. It will make a modest, but meaningful, contribution to the funding that is available, particularly in cases where no responsible developer can be identified or held to account. I think that those developers should be held to account not only in financial terms; they should also be held to a higher standard, as Mr Leonard describes.
I believe that developers have an important role to play in what should be a collective effort. We should also reflect that many in the sector have come forward to take responsibility for assessing and remediating buildings or are involved in delivering that, which is as it should be. That co-operation is both welcome and necessary, and we should recognise it. The levy seeks to build on the shared understanding that building safety is a collective responsibility. It ensures that the development sector will make what I believe is a fair and proportionate contribution that is consistent with expectations elsewhere in the UK.
That is not to say that I do not think that the bill deserves further scrutiny or changes. The Finance and Public Administration Committee’s stage 1 scrutiny rightly focused on whether the levy strikes the right balance between improving building safety and supporting the delivery of new housing, which we all agree is of the utmost importance. Getting the balance right will be crucial. Scotland faces significant housing pressures and we have to be careful not to undermine development viability, particularly in marginal markets. The bill reflects that careful consideration but, of course, it can be refined further.
Let us reflect on the fact that protections are in place for affordable housing and recognise the importance of sustained delivery in the sector. The Government has committed to a levy-free allowance for small and medium-sized developers, which are less able to absorb additional costs. It has also provided exemptions for development on our islands, acknowledging the distinct housing challenges and viability constraints that they face. The minister’s response to the committee’s report responded directly to an issue that the committee had raised and gave a commitment to use secondary legislation to initiate similar exemptions to those in our island communities for the most remote parts of the mainland.
Presiding Officer, you said that there was some leeway. Does that leeway still exist?
There is leeway, but I presume that one would not want to take over all the extra time.
I assure the Parliament that I will not use all the extra time that we have. I will crack on.
Taken together, the measures that have been laid out in the bill are designed to target the levy where it can most reasonably be borne, while limiting the impact where pressures are most acute. We should remind ourselves that the £30 million that it is estimated the levy would raise per annum represents approximately 0.6 per cent of the estimated £4.6 billion annual value of Scotland’s new build housing market. By any reasonable assessment, that is a proportionate and modest contribution in pursuit of what we would all recognise as a vital public good.
We have all reflected on the tragedy at Grenfell tower. We have had the Government’s response to the Grenfell tower inquiry phase 2 report, and it has accepted all 58 recommendations. The challenge is that we do not ever want to see a situation like Grenfell, or all the other circumstances that Mr Leonard talked about, be repeated in the future.
Mr Hepburn, you will now need to conclude.
That requires us to act. We cannot stand aside. Those who say that the bill needs to be further refined can get on with that, but they cannot vote against it today if they are committing to doing that going forward. We should support the bill at stage 1.
16:15
I am pleased to be able to contribute to the stage 1 debate. As a Parliament, it is right that we consider further measures to tackle dangerous cladding, but the bill before us today creates too many risks for the sector and for house builders at a time when construction is already too slow across Scotland.
All residents deserve to see urgent action on dangerous cladding, to deliver certainty and peace of mind, but for far too long, the public have seen delay and dither from the Scottish Government. Progress on tackling the issue has been slow, despite the SNP receiving funding through Barnett consequentials to address dangerous cladding. There has been some discussion this afternoon about where that money is, how much has been spent and how much is left, but we have not had complete answers on any of that.
We know that few buildings have been assessed for dangerous cladding, and a fifth of the programme’s spending has been on temporary fixes. However, although further progress is clearly needed on the issue, we also know that Scotland is facing a housing emergency crisis.
Social housing completions are at their lowest level since 2017, and private sector completions are at their lowest level since 2018. Although recent house-building statistics have been disappointing, the bill risks making the housing emergency even worse. We should not be considering a bill that could create an even worse housing situation. Not for the first time in this parliamentary session, the SNP Government is introducing primary legislation that would add costs and barriers for developers across Scotland. That is not something that we should be considering.
Homes for Scotland has said that the levy does not reflect the sensitivities of the Scottish housing market, and that it could increase the cost of a new home by up to £3,500. It also warned that, despite affordable housing being exempt from the proposed levy, it will
“not be protected in practice due to interconnectedness between private and social sectors”.
Indeed, numerous stakeholders have warned that a reduction in new housing supply will be likely if the legislation goes forward. Those are risks that we do not want to see.
The bill’s business and regulatory impact assessment made it clear that many stakeholders could not provide a “clear picture” of the costs that the bill would create for them. The BRIA also said that there was “limited evidence” of the potential impacts.
More generally, there are concerns about the lack of data and about how effective the levy would be in improving cladding remediation. We have heard about that already today. Even if the levy raises the £30 million that has been talked about, which is far from certain, that would cover only a small fraction of the total costs.
Despite the issue having been on the Government’s radar for years, the SNP still does not know what the total cost of cladding remediation is likely to be. We are years down the road. The committee heard evidence that the financial memorandum uses “estimates of estimates”. Once again, we still do not have clarity on the actual funding package and its full impact.
The member talks about uncertainty on the costs. Does he know what construction inflation is likely to be over the next 12 to 15 years? Does he think that anybody knows?
Minister, you should be looking at where we are now, before considering what will happen in the future. You have not even managed to do what you should be doing for today, far less what you need to do for the future.
Always through the chair, please.
We do not need a crystal ball; we need something done to make sure that people are safe and secure today, never mind in the future.
It is welcome that the bill includes an exemption for island developments, because island developers face specific challenges. However, given that many of those challenges also apply to rural areas, it is disappointing that the bill does not contain the same exemptions for them. Scottish Land & Estates has warned that, in its current form, the levy risks increasing the economic decline and depopulation of rural Scotland, which, once again, is not something that we should even be considering. It also highlights that the levy could undermine investor confidence in a “fragile” sector of the housing market.
Homes for Scotland has warned that the levy could mean that more potential rural housing sites become uneconomical, which would lead to higher-margin sites in urban areas being developed instead. Once again, we should not be doing things that could affect our rural economy in ways that detract from what rural areas are trying to do; we should be supporting them.
The minister has said that the inclusion of further exemptions in the bill would mean more of the levy’s impact falling on other areas. However, I would urge the minister to consider the damage that not having an exemption could have on rural development. I believe that the committee’s recommendation of providing an exemption for “remote rural areas” would be helpful as a starting point.
The last thing that Scotland’s housing sector needs is another SNP tax. The Scottish Government says that it accepts the urgency of Scotland’s housing emergency, but current house-building rates are already well below where we need to see them. The levy would risk making the emergency even worse, by hammering investment and house building. That means that the Scottish Conservatives cannot support the bill at stage 1.
All parties in the chamber agree that the existence of dangerous cladding needs to be addressed, but that does not need to happen at the expense of tackling the housing emergency. Instead of inventing another unnecessary tax, the SNP Government should be delivering the required action on cladding that it has been promising for years and ensuring that residents and developers get exactly what they want. Otherwise, the Government is failing to deliver, failing in its responsibilities and failing on the committee’s recommendations. For all of those reasons, I will not be supporting the bill at stage 1.
16:21
I am pleased to speak in support of the general principles of the Building Safety Levy (Scotland) Bill and to place on record my backing for the Scottish Government’s clear reminder today that building safety is a fundamental tenet of construction policy.
I am not a member of the committee that has looked at the bill, but I can hear that there is a bit of a debate about it. Looking over the stage 1 report in preparation for today’s debate and hearing what has been said in the chamber, I have been a bit surprised that there is conflict, although I hear the various points of view coming through.
I believe that the bill is about doing what is right and necessary. It is about ensuring that people can feel safe in their homes, whether they live in a high-rise block in one of our cities or in a flatted development. It is about making sure that the costs of fixing historical failures in our building system do not fall on the shoulders of home owners who bear no responsibility for those failures. The Scottish Government has been clear from the outset that residents should not pay the price for unsafe cladding. That principle underpins the cladding remediation programme, and it underpins the bill.
The building safety levy is designed to ensure that developers make a fair and proportionate contribution to the cost of remediation, in line with equivalent arrangements that are already in place in England.
We should remind ourselves why the legislation is necessary. The Grenfell tower fire, which has been mentioned already, was a national tragedy that exposed systemic failures in building safety, regulation and accountability. In response, the Scottish Government has accepted all 58 recommendations of the Grenfell inquiry phase 2 report, and it is taking forward a comprehensive programme of reform, including strengthened building standards, improved enforcement and clearer lines of responsibility.
However, simply making policy changes does not remove dangerous cladding from buildings; that requires sustained investment over many years. The latest estimates suggest that Scotland’s cladding remediation programme could cost as much as £1.7 billion over a 15-year period. Against that backdrop, the building safety levy is expected to raise around £30 million per year, which will be a positive contribution to the funding that is available annually for cladding remediation.
The levy is targeted. It applies to the construction of certain new residential properties and is calculated on the basis of floor area, with the precise rate to be set by regulations. Importantly, it is not a blunt instrument. The bill contains a levy-free allowance to protect small and medium-sized developers, exemptions for affordable housing and additional protections for island communities, where housing pressures are especially acute.
Those design features matter. Throughout the development of the bill, the Scottish Government has been mindful of the urgent need to increase housing supply. In communities such as mine in Coatbridge and Chryston, demand for good-quality, affordable homes remains strong. Regeneration projects, brownfield redevelopment and new housing sites all play a role in supporting local jobs and meeting local need. It is therefore right that the levy has been structured to minimise any negative impact on housing delivery.
The Government’s assessment, which mirrors that of the UK Government, is that the levy will not a have significant macroeconomic impact and that any effect on housing supply will be small. At £30 million per year, the levy represents around 0.6 per cent of the value of Scotland’s new-build housing market. It is a modest contribution when set against the scale of the challenge that we face and the benefits of safer homes for thousands of residents.
The bill also reflects a sense of fairness. It is to be welcomed that, where developers are responsible for buildings with unsafe cladding, many have stepped forward to accept responsibility for assessments, mitigation and remediation. However, there remain buildings with no linked developer or for which the original developer no longer exists. Without the levy, the cost of making those buildings safe would fall on the public purse alone or, worse, on individual home owners. That is simply not acceptable. In Coatbridge and Chryston, and across Scotland, residents in flatted developments should not be left facing uncertainty, anxiety or unaffordable bills because of historical failures in construction and regulation. The bill helps to ensure that the burden is shared more fairly across the sector that profited from house building during the period when unsafe materials were used.
In my constituency in recent times, there have been fires in high-rise flats. A couple of years ago, there was a fire in High Coats at a block of flats that North Lanarkshire Council has now brought down. More recently, just before Christmas, there was another fire in Calder Court in Whifflet. Although that does not seem to be directly related to cladding, the fire caused immeasurable turmoil to a number of residents in the block, who have been supported by the council, me and my office. They were forced to access hotels and have their homes cleaned up—all before the festive period.
As Richard Leonard pointed out, those are real issues, and they happen all the time. Although I appreciate that there is a bit of a debate about whether the bill addresses them, for me, supporting it is the right thing to do to help people who are in such situations, such as my constituents.
The revenue that will be raised through the levy will be used exclusively for building safety expenditure. That includes cladding remediation, which the Scottish Government has committed to delivering at pace. By 2029, every high-risk residential building over 18m is to be resolved, with buildings between 11m and 18m placed on a clear pathway to resolution. That is an ambitious target, but it is one that residents rightly expect us to meet. Progress is being made, as we heard.
I note that the Finance and Public Administration Committee made no recommendation on the general principles of the bill but expressed trust that the Scottish Government would respond constructively to its recommendations. I hope that—and, hearing the debate, I am confident that—the Government will continue to engage positively with the Parliament as the bill progresses and that there will be opportunities at later stages to refine and strengthen it where appropriate. Where members from Opposition parties as well as the Government party have made suggestions—such as we heard from Michelle Thomson earlier—I hope that there will be opportunities for the bill to be improved if we agree to its general principles today.
The bill is about learning the lessons of the past and acting responsibly in the present. It is about ensuring that people in my constituency and in communities across North Lanarkshire and throughout Scotland can have confidence in the safety of their homes. It is also about striking a fair balance between supporting housing delivery and securing the funding that is needed to address one of the most serious building safety challenges of our time.
For those reasons, I support the general principles of the Building Safety Levy (Scotland) Bill and urge colleagues around the chamber to do the same.
16:28
The Government states that the cost of the cladding remediation programme is expected to be somewhere between £1.7 billion and £3.1 billion, which is quite a range of possibilities. If £450 million is to be raised over 15 years, which is optimistic, that is only between 15 and 26 per cent of the costs. It would be better to take the whole of that from general taxation.
I accept the point that the process has taken far too long, but it would have been irresponsible to spend the £97 million too quickly. It should be spread over all the buildings that need help and it would have been wrong of the Government to spend it on the first two or three that came along.
With the bill, Westminster has painted the Scottish Government and Parliament into something of a corner. As the minister said in evidence—[Interruption.] As the minister said in evidence, the order in council that devolved the relevant powers to Scotland is narrowly focused on the building standards process.
The Finance and Public Administration Committee heard strong arguments from witnesses that it was unfair to single out developers for the levy when many other businesses had been involved in the cladding problem, including manufacturers of the cladding materials—
Will the member take an intervention?
No. I am sorry, but Willie Rennie did not give way to me when I was trying to make a fair point.
That is not like you.
No, it is not like me.
Others involved in the cladding problem included architects and local authorities that signed off building warrants. I personally felt that spreading the costs more widely, for example by an increase in corporation tax, might have been fairer. However, clearly, that is outwith the powers of the Scottish Parliament. That there is opposition to the levy from affected developers is clear. However, we have to remember that almost all businesses oppose almost all taxes, and so we should take some of those objections with a pinch of salt.
I welcome a number of features in the bill, including that there can be different rates for different types of land. I would very much agree with any support that we can give to brownfield developments, rather than losing even more ground space, for example around Glasgow. I therefore welcome the assurance that the minister gave the committee that there will be relief for brownfield sites. I also welcome the fact that Revenue Scotland will collect and administer the tax, and that the liability will arise at a later stage compared with England, which will help developers with their cash flow. I agree that not automatically exempting smaller sites is correct, as they could involve high-end properties.
John Mason is talking about exemptions. We have been here before with rent controls. As soon as we start adding exemptions, would it not be more sensible and practical to realise that what we are bringing forward is just not right and that we need to go back to the drawing board?
I do not understand that point. Every tax has exemptions. Every measure that we take has exemptions. There will always be special cases and exemptions.
However, in relation to housing funded by local authorities, if we push up the costs of building affordable housing, it ends up being the public purse that has to pay out more grant. Therefore, I welcome the Government’s response to the committee’s report, in which it stated that it wants to
“avoid any circularity in public funding”.
I very much support the fact that the Scottish Government is using primary legislation rather than the secondary legislation approach that has been taken in England. Other features that are probably acceptable include that the scope of the expenditure covers building safety risks more generally, rather than purely the current cladding issue. The uncertainty over the costs—estimated at £1.7 billion to £3.1 billion—is probably acceptable as well.
However, there are other provisions that I have reservations about, including home owners not having to pay anything. That seems at odds with other products or services that we all buy, whereby the purchaser takes on at least some of the risk under the principle of caveat emptor.
I also question the exclusion of hotels. After all, people who stay in hotels tend to be better off, and a few more pounds on their bill would not hurt them. I accept that there may be relatively few large new hotels being built, but every little helps. Therefore, I am not convinced by the Government’s response to the committee’s recommendation in paragraph 112. It says that commercial entities such as hotels are not intended to be covered by the cladding remediation programme. However, the reality is that there is very little link between those paying the levy and those with the cladding problems, so I do not think that that argument holds water.
I also question the use of floor space rather than value. Someone buying a very expensive detached house in a smart area will pay the same as someone paying for a bottom-of-the-range mid-terrace property or flat in a poorer area, because the properties are the same size. I accept that floor space is easier to measure, but I think that that approach is less fair and makes the tax somewhat regressive. Therefore, I am very much in agreement with the committee’s recommendation in paragraph 83 that the Government should consider using market value rather than floor space. I note the Government’s response on Tuesday 6 January, arguing against that. There might be complications, but I think that they can be overcome. The Government reckons that the levy will not be added on to house prices. However, like others, I am sceptical about that.
Whether Revenue Scotland can keep to its usual target of keeping administration costs under 1 per cent also has to be questioned. We know that the set-up costs will be greater, but the levy will be a very small tax in the scheme of things and is therefore potentially inefficient and costly. The recent Government response suggests a 2.7 per cent admin cost. That problem is exacerbated by the uncertainty as to how much tax will be collected, as figures appear to be based on the English model, where there is a very different mix of private and affordable housing.
I remain somewhat unclear whether the Scottish Government intends to match the UK levy rate, as it does with landfill tax and aggregates tax, or whether there would be a higher rate in Scotland if the tax base here turned out to be lower and the £30 million target proved difficult to achieve.
It is interesting to note how often the Government’s response to the committee refers to our system being just like England’s. That is not a normal response for an SNP Scottish Government to make, and it illustrates a key problem with the bill and the levy, which is that the room for manoeuvre that is allowed to us by Westminster is very limited.
I do not particularly like the situation that we find ourselves in. However, the responsible thing to do is to support the bill at stage 1 and, perhaps, to improve it later.
16:35
I thank all members for their speeches in what I think has been a very well-informed debate, which comes down to the following points. Does the performance of the SNP Government on cladding remediation need to improve vastly and urgently? Undoubtedly—I think that there is consensus on that. Will more finance be required to complete the work? Certainly—that is absolutely clear. Is the immediate availability of capital the reason for the SNP Government’s dire performance? Absolutely not.
As my friend Richard Leonard set out in what was a typically passionate and characteristically erudite speech, the situation is, frankly, intolerable. On 4 September 2024, John Swinney said:
“Keeping residents and home owners safe is our priority, and we are taking action to protect lives by ensuring that the assessment and remediation of buildings with potentially unsafe cladding is carried out.”—[Official Report, 4 September 2024; c 26.]
At that point—seven years on from the Grenfell disaster, in which 72 of our fellow citizens perished—remediation had been completed on precisely zero buildings in Scotland. Today, nearly a decade after Grenfell, that figure still stands—remediation has not been completed on a single building in Scotland. That is nothing short of shameful, and it betrays the well-meaning words of John Swinney, Nicola Sturgeon and any other SNP minister who opines or has opined on that basis.
By contrast, in England, work on 1,938 buildings had been completed by November 2025. That difference is scarcely believable, and it begs the question that the Scottish Government should be reflecting on its performance in this policy area in the round. It should do that urgently.
The reason why work has not been completed on a single building is not that we do not have a building safety levy. We should all be able to agree on that. The Scottish Government has failed to spend even a fraction of the nearly £100 million that was provided by the UK Government for the purposes of cladding remediation. As I set out in my intervention on Jamie Hepburn’s speech, by 30 September 2025, £14.2 million of that £97 million had been spent. Not only must the SNP Government explain why it has taken so long to act—leaving the people of Scotland at risk of fire and death in their own homes—but it must urgently change direction.
Willie Rennie set out some of the issues that are holding back progress in the construct of the law as it governs this area of housing in Scotland. Those are the areas that must be looked at, and an additional tax on house building will not change any of those reasons.
Critically, the bill comes at the worst possible time, because Scotland is still in the grip of the SNP’s housing emergency. That was acknowledged by the Government nearly two years ago, but precious little has been done about it since then. There are major social consequences to that side of the equation, too, which we would all recognise. More than 10,000 children are stuck in temporary accommodation, house building rates are at record lows and it is estimated that the levy will add an additional £3,500 to the cost of building a new home.
In evidence to the Finance and Public Administration Committee, house builders were clear that the bill will render many developments across Scotland non-viable. I fear that anything outside of Edinburgh and the Lothians will be at risk, which is part of the reason why we called for the sensitivity analysis.
In Inverclyde, scant little social housing has been built over the past two years; the housing associations have refused to build new housing because there is excess stock. How does Michael Marra suggest that the Scottish Government force housing associations to go and build when they do not want to build?
It is certainly a complex situation. I do not know the specifics of the Inverclyde housing associations. However, from my area, I know that the vast cut that the Government made to the affordable housing budget as part of an emergency budget resulted in a lack of availability of capital, meaning that housing associations in Dundee and Angus had to change their plans. That was one of the issues.
Stuart McMillan rose—
I would allow Stuart McMillan to come back in, but I am afraid that I must make some progress.
You do have some time.
There are different circumstances in different areas. We know that affordability is absolutely key and we must make sure that there is a proper sensitivity analysis. I ask the minister whether, in his closing speech, he would commit to making sure that it is an independent analysis that is done properly and that takes account of the regional variability across Scotland. Doing that would speak to Stuart McMillan’s concern that he wants to see that nuanced and varied analysis across the country so that we can understand properly what would happen if the SNP were to decide to progress with the bill.
Michelle Thomson told us that it was a highly unusual step for the Finance and Public Administration Committee to make no recommendation on the general principles of the bill. That gives a clear indication of the serious misgivings that the committee had about the viability of the levy in its current form. I am deeply concerned about the potential impact on the housing market, which is fragile at the moment.
In the—frankly—shambolic denouement of this parliamentary session, we have 24 bills left to process in 11 weeks. I suggest to the Government that it may wish to reflect on whether this is one bill that could be set aside. In the light of the report from the Finance and Public Administration Committee and the views that have been shared, not only from the sector but across the Parliament, the Government might reflect on whether there is a better way to get on with spending the money that it has to deal with the cladding situation. Then, when it has to raise that money and put those plans in place, it can come back with a better proposal—one that is well founded, well rounded and consulted on, that is developed and that can meet the challenge, so that we can deal with cladding remediation appropriately.
We have a little extra time remaining. I call Craig Hoy.
16:41
I agree with Willie Rennie—[Interruption.] I cannot find my card.
That is the extra time gone. [Laughter.]
We will give Mr Hoy a moment.
I apologise, Presiding Officer—that is some of the extra time gone.
I start by agreeing with Willie Rennie: the Government has put this Parliament in a hellish dilemma. However, being put in a dilemma does not mean that you should do as SNP MSPs appear to be doing, which is to take the easy way out and nod something through.
In this debate and in the period since the Grenfell tragedy, we have seen this Government—which does not have a reputation for competence—displaying pure, greedy incompetence. The fact that the minister seems to be incapable of or unwilling to answer the question of how much money has been spent so far on the challenging issue of remediation is absolutely shocking. It is shocking to those people who cannot yet sell their homes, who cannot move and who, in some cases, cannot remortgage. Worse still, it is shocking for those people who cannot go to sleep at night because they are not certain that the homes that they are in are safe. Minister, you need to up the pace and you need to do it urgently.
Always speak through the chair, please.
The loss of 72 lives at Grenfell was a tragedy. Men and women, young and old, and many children died. After the shock and the pain came grief and questions: how was that allowed to happen and who should take responsibility? The first phase of the Grenfell inquiry examined the immediate causes of the fire and how it spread with such lethal effect. The second phase explored the underlying causes of the fire, including the fire safety standards, the response of the emergency services and the building design. It also set out a simple question: what happens next?
That blaze took place 10 years ago and many of those questions have been answered. However, as today’s debate has shown, there are other questions: after all that, why has Scotland been so slow to remediate those buildings where cladding still poses a fire risk and why, despite having been given that £97.1 million, are we finding out today that only £14 million has been spent? Why introduce a levy to raise money urgently if the Government is sitting with a pot of money that should be spent urgently? This is the dilemma that has been put before the Parliament today: does the Government actually need this money to accelerate the remediation process? It is clear from Audit Scotland’s evidence that it does not need it. What the Government needs is the political will and the nous to get on and do it.
The debate today and the Finance and Public Administration Committee’s report, which I welcomed, show that there are significant concerns about the bill. I am not going to do what Jamie Hepburn and others did and simply roll over and say that we will give the Government the benefit of the doubt and that it will all come good in the end. As Liz Smith clearly articulated, the proposed building safety levy might not be the right mechanism for remediating Scotland’s cladding problem. As it stands, the bill cannot enjoy our confidence to proceed to stage 2. If the Government is re-elected—I seriously hope that it is not—it could introduce legislation in the next session of Parliament, but, in the meantime, ministers could direct the existing funds to accelerating the remediation process.
Meghan Gallacher identified the completely inconsistent and incoherent way in which the Government is responding to those who are seeking to remediate their buildings at this point in time. That suggests to me that there is a lack of direction from the Government. I get the sense that the minister is being hung out to dry. There has been no sign of the Cabinet Secretary for Housing. The Government is treating the matter simply as an issue of tax—in other words, a fiscal matter for the minister to deal with—when we all know that the Cabinet Secretary for Housing and other parts of Government should be on it 24/7 to ensure that people’s properties are safe.
I turn to some of the specific concerns that have been raised by the committee and, more importantly, by stakeholders, who were full-throatedly and almost universally against the levy. It is crystal clear to me that there are certain areas in which people have coalesced around the view that the Government must think again.
One such issue is that of the polluter-pays principle, which goes to the heart of the matter. The bill drives a coach and horses through the principle that the polluter should pay, because we now know that, at the end of the day, the £3,500 will be added on to the cost of a new home, so it will be first-time buyers who will pay the levy, not the building companies and certainly not the rogue builders and manufacturers that allowed dangerous cladding to be installed on buildings in the first place.
Not enough reference has been made in the debate to rural Scotland. We heard very strong testimony from Scottish Land & Estates and others that the rural housing market is extremely fragile. That is perhaps where the housing crisis is most acute. There is still no clarity on how an exemption for rural areas might be formulated. I will give way to the minister, as he is looking somewhat confused, which is rare for him, although not impossible.
We are having discussions about the application of exemptions, and we would welcome suggestions on how those might be taken forward.
We appreciate that certain remote areas will be exempt from the levy, but, as I was just about to say, the issue with a rural exemption is that the Government must first have a coherent definition of rurality, the need for which runs through all aspects of public policy. I was about to say that perhaps the minister could reach out to Scottish Land & Estates, because it has suggested some criteria that would aid the Government in relation not only to the bill but to rural pubs and hospitality, which similarly fall foul of the Government’s incoherent approach to defining rurality.
I am aware that I am running out of time, but I want to talk about a key issue, the importance of which was made clear in the evidence that was given to the committee—that of the fragility of the Scottish housing market. Those who said, “There’s a similar scheme in England, so it will all be fine,” underplay and underestimate the fragility of the housing market. The building safety levy could be the material change in the operating environment that simply means that developers say no to further development in Scotland. For a Government that has conceded that there is a housing crisis, it would be negligent in the extreme to take no account of that.
Ultimately—interestingly, there is almost cross-party consensus on this—the Parliament has the opportunity to tell the Government to take some time to go away and come back with a better bill. If, in the meantime, the Government spends the remaining £80 million that it has—at the present run rate, I think that that money will probably last for a decade or more—it could reach out to other parties with a view to funding the necessary work through general taxation. The Government is wasting taxpayers’ money on many projects, and I am sure that, if it came to the Parliament to request £10 million or £15 million to continue the remediation process until such time as we had a coherent system in place, it would find that there would be cross-party support for that.
However, at this point in time, the Building Safety Levy (Scotland) Bill is the wrong bill. It would be negligent for the Parliament to pass it, and I hope that it does not reach stage 2.
16:49
I welcome the contributions that have been made throughout the debate, and I will address many of them shortly. Before I do that, I draw members’ attention to the cladding remediation programme, which seeks to address the issue of unsafe cladding. In 2024, the Parliament unanimously supported the Housing (Cladding Remediation) (Scotland) Act 2024, which was intended to underpin and support the delivery of that programme. The UK Government’s building safety levy legislation also received cross-party support in the UK Parliament. This bill is critical in establishing appropriate funding for that work. If it is not supported, the Scottish Government will have no choice but to look to the existing capital budget envelope for the £360 million to £450 million that the levy is intended to generate over 12 to 15 years. I hear Craig Hoy’s offer to work with the Government to find that in the budget. Craig Hoy might want to lodge an amendment to proposals in the budget next week to propose that that will come from another part of the budget at the same time as he is proposing £1 billion in tax cuts.
To take that money from public spending other than from the levy would mean less money for hospitals, roads, schools and, of course, affordable housing. The point that we need more affordable housing has been made widely this afternoon. We know from research by the Joseph Rowntree Foundation and others that, if we cut public spending in that way, the impacts will be felt most by lower-income households, and I consider that to be an unacceptable trade-off.
Surely the minister must accept that not a single member has asked the Government to take funding from public finances; he is simply being asked to recognise that a pot of tens of millions of pounds has been allocated by the UK Government, which is available to spend, and the Scottish Government has been asked to bring forward a levy proposal that we can support, which has the clarity that we still need and which adheres to the polluter-pays principle. Not a single member has asked the Government to take funding from public finances. The Government has simply been asked to think again about the levy proposal and to use the funds that it already has at its disposal.
Some members have been honest about that. If I heard him correctly, Craig Hoy asked for the funding to come from other parts of the budget just a few minutes ago. Other members have not been so honest, because they know that the total cost of this is indicated to be somewhere between £1.7 billion and more than £3 billion. The money that is being spent as we speak does not touch the sides of that. We are talking about less than £100 million compared with something potentially in excess of £3 billion. If Mark Griffin needs me to lend him a calculator to work that out, I am very happy to do so.
Everything that the minister is saying is whataboutery. He has had £97.1 million for five years. He has spent £14 million of it and he has £83 million sitting there. The idea that it is going to cost more than that, so we are not going to do anything, is pathetic. The minister must know that it is pathetic. Craig Hoy said that it will take a decade to work through the money. It is going to take 40 years—that is what it will take at the current rate of attrition on the money. Why does he not just get on with it?
Again, Stephen Kerr is struggling to add up the numbers—[Interruption.]
Let us not shout at one another.
The point is that the programme is being taken forward and the money is being spent, but the whole programme in its entirety could cost more than £3 billion, and that money has to be found from somewhere. If the legislation is not put in place, that money will have to come from public spending. It is time that members around the place, including Richard Leonard, recognised the impact. He is usually the last person to be looking for cuts to other areas of public spending.
I want to go through and clarify some of the points that have been made by members.
Will the minister take an intervention?
Yes, of course. I will be absolutely delighted to do so.
Just for the record, I am not calling for cuts to other areas of public expenditure. I would like to see more public expenditure, but I would like to see you using the public expenditure that you have to remediate cladding.
Please always speak through the chair.
Richard Leonard is another member I am going to have to lend the calculator to. We are talking about a small number of tens of millions of pounds compared with the more than £3 billion that is required for the programme. [Interruption.]
Let us hear the minister.
Anybody who is watching this can understand the numbers and can understand that that potential £3 billion spend has to be funded from somewhere. If Richard Leonard thinks that it should come from somewhere else in the public purse, people can judge his comments on that.
I will talk about some of the comments made by members, starting with a couple of points raised by the Finance and Public Administration Committee’s convener. I am happy to pick up separately with him the point about having an exemption for affordable housing. It is my understanding that any housing funded by councils through powers in the Housing Act 1988 or the Housing (Scotland) Act 2001 would be covered by that exemption, but if he thinks that there is an issue that needs to be clarified, I am happy to pick that up.
A number of members raised the issue of having a sensitivity analysis. The Government is absolutely committed to producing and publishing updated impact assessments when we publish the rates later this year. Those assessments will be developed along with the expert advisory group, which, of course, includes representatives from the sector.
Michelle Thomson made a point about developer compensation in the supply chain, which I am also happy to pick up separately if necessary. I understand that the Building Safety Act 2022 made amendments to the prescription periods in Scotland, allowing developers to make claims on the same basis as in the rest of the UK. We have offered to work with the sector on any specific examples of barriers to doing that. No specific cases of a developer being unable to take forward claims for compensation within the supply chain have yet been identified, but, as I said, we are happy to engage separately with the member on that issue.
Will the minister take an intervention?
I would like to make some progress.
The committee heard a wide range of evidence not only from the sector but, for example, from the Scottish Fire and Rescue Service, which we should listen to when it comes to matters of building safety. The service supported the levy as the only viable option, given the UK Government’s position in acting unilaterally. Peter Drummond of the Royal Incorporation of Architects in Scotland, who was quoted by Richard Leonard, has said that architects support the levy as being the most pragmatic solution available.
John Mason made a number of points about the specific details of exemptions, which show that the Government is absolutely willing to engage. We have already reviewed the exemptions and made changes and are happy to look at other constructive suggestions from stakeholders or members about the details as we take the bill through its next stages.
Michael Marra called for a delay to the bill. As things stand, the bill will be implemented in 2028, during the financial year 2028-29, so we are at least two and a half years away from any cash flowing into the public sector finances as a consequence of the bill. It is important to recognise that. We are not talking about money that will be spent now; we are talking about money that we will be spending in two and a half to three years’ time, and anyone would recognise the need to be able to raise those funds.
I will take Meghan Gallacher’s intervention.
In my earlier contribution, I raised the issue of letters that I received from two residents of the same building who received two different responses from the Government, one of which was fully supportive of funding cladding remediation, while the other was lukewarm at best. I need to know from the Government when the cladding remediation directorate changed the content of its letter of support to residents, who approved that letter, whether it was seen by Scottish Government ministers and how many people have been sent different types of letter. The inconsistency means that there will be different levels of support, which is, frankly, wrong.
I am happy to take up the specifics of that constituency case if Meghan Gallacher wants to write to me about that. To clarify the position, the Scottish Government will pay for essential works relating to cladding to address risks to life but clearly will not pay for on-going maintenance or other building management costs.
In conclusion, it is important to get some clarity by taking a step back to look at what is actually happening. The public outside will be looking at today’s debate and making up their own minds, but what will they see? They will see Tory, Labour and Liberal Democrat politicians whose parties in the UK Parliament voted to put in place measures that would take from developers in England some of the costs for the substantial cladding remediation programme that must take place. Then they will see their compatriots in this place voting against a funding levy to support building safety remediation in Scotland. That proposal was not taken forward by just one party; it was developed under the previous Conservative Administration at the UK level and taken forward by a Labour Government at Westminster.
The public will see that frankly blatant hypocrisy. We would never guess that there was an election round the corner. However, to be honest, I think that it will absolutely backfire, because the general public will see it as those parties voting against taking money from developers to support cladding remediation and putting the focus back on reducing public services. I think that they will recognise that for exactly what it is.
You must conclude, minister.
I will conclude, Presiding Officer. The Government is very clear that the measure is absolutely essential if we are to be able to support the significant funding to deliver the much-needed cladding remediation programme, the cost of which would otherwise accrue to the public purse. I urge all members to support the bill at stage 1 at decision time today and to engage constructively with the Government on any amendments that they want to lodge at stages 2 and 3.
That concludes the debate on the Building Safety Levy (Scotland) Bill at stage 1.