Housing Secretary Michael Gove has written to major investors in cladding companies involved in the Grenfell Tower blaze, warning them they face “severe consequences” if they do not agree “a comprehensive financial package” to fix unsafe buildings.
Gove wrote to investors in Ireland’s Kingspan, US-based Arconic, and France’s Saint-Gobain and urged them to use their “position of influence” to reach “a just resolution for all concerned”.
Investors who were sent letters include US funds Blackrock, Vanguard, and Fidelity Management and Research, as well as Norges Bank, the central bank of Norway.
The government says the three construction firms were responsible for manufacturing the majority of cladding used in the Grenfell tragedy, which killed 72 people in 2017, but so far have not contributed to fixing other unsafe UK buildings their products are used in.
Gove warned that if a settlement is not reached the government’s focus “will be trained upon them” and “the consequences for that firm are likely to be severe.”
He added that there are likely to be consequences for shareholders’ reputations, and their financial stakes, if he is forced to use “the legal and commercial tools available” to ensure the position of the cladding companies “becomes extremely uncomfortable”.
The minister says that he considering whether further tools need to be handed to regulators or the government to settle the issue.
Gove said: “I have always been clear that those responsible for the building safety crisis must pay.
“But despite the fact that their products continue to put lives at risk, some cladding firms have no intention of doing what’s right and addressing their moral and financial obligations to innocent residents.
“Today we ask responsible investors to use their influence to encourage these companies to come forward immediately with a comprehensive financial package for remediation work.
“To those cladding companies who fail to do the right thing: you will face severe consequences and I will use all commercial and legal tools available to me to ensure you take responsibility.”
Kingspan has publicly said that it would be willing to pay for remediation costs where its products had been used inappropriately, but has not yet agreed to a financial package.
So far 46 firms have agreed to the government’s Developer Remediation Contract, which sets up a £2bn fund to fix fire-safety defects in English buildings over 11 metres they had a role in developing or refurbishing.
Firms who have signed this contract include The British Land Company, Taylor Wimpey, Land Securities and Persimmon.
The Department for Levelling Up, Housing and Communities has also published an independent review by Paul Morrell and Anneliese Day, which looks at the current testing regime for construction products.
The foreword to the review says: “It has become increasingly clear that improvements in construction product performance assessment must form a critical element of a new, stricter regulatory framework.”
The department says it will “carefully consider” the report and set out proposals for reforms in due course.
