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Michael Gove has already written to the bosses of Kingspan, Arconic and Saint-Gobain demanding that they start to take a bit of responsibility for the ethically dubious behaviours and actions that were exposed at the Grenfell Tower inquiry.
Now Gove is following the money: he has written to some of the biggest shareholders in the three companies – including Blackrock, Vanguard, and Fidelity, as well as investors like Norges Bank, the central bank of Norway – soliciting their support to bring pressure to bear.
The housing secretary said that the manufacturers they invest in will face “severe consequences” if they do not come forward with a comprehensive financial package to fix unsafe buildings.
The letters add that there are likely to be consequences for shareholders’ reputations, in addition to their financial stake, if Gove is forced to use “the legal and commercial tools available” to ensure the position of the cladding companies “becomes extremely uncomfortable”.
Michael 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. It cannot be right that cladding companies continue to profit whilst so many innocent, hardworking people face financial hardship and misery.
“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.”
To date, the three construction product manufacturers – who together were responsible for manufacturing the majority of the cladding systems used on the Grenfell Tower refurbishment – have not contributed a penny to the cost of fixing buildings in the UK that their products have made unsafe. Evidence at the Grenfell Inquiry showed that the three companies for knowingly sold flammable products for wholly inappropriate applications. Their products were routinely mis-sold through inaccurate marketing information and misappropriated safety test results.
The secretary of state has written to the bosses of Kingspan, Arconic and Saint-Gobain over the last month to tell them that he has been “appalled” by their behaviour. He has asked them to meet officials from his department and explain how they will scope, identify, and pay for remediation works. The invitation followed Kingspan saying publicly that it would be willing to contribute towards remediation costs where its products had been used inappropriately. While Kingspan agreed to meet DLUHC officials, none have yet committed to any new remediation funding.
Gove was particularly scathing to Arconic, saying that so far it had “failed to engage in any meaningful way in any part of the industry-wide negotiations” that have taken place.
Efforts to make cladding companies pay are proceeding in tandem with measures used by the Department for Levelling Up, Housing & Communities (DLUHC) to get developers and freeholders to contribute to remediation costs of unsafe buildings.
As of today, there are 46 signatories to the developer Remediation Contract, which for the first time in law commits developers to fixing all life-critical fire-safety defects in English buildings over 11 metres they had a role in developing or refurbishing.
There just four housing developers that DLUHC believes to be withing scope that are still refusing to sign – Abbey Developments, Avant Homes, Dandara and Rydon Homes.
That report was commissioned in response to evidence heard by the Grenfell Tower public inquiry about the behaviours of manufacturers and those responsible for advising on the fire-performance of products, including serious failings in the system for testing construction products that involved cladding.
The department will consider its recommendations and set out proposals for reforms in due course, it said.
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