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Thank you, Mr Speaker, for allowing this debate to be held today. I thank the Members from across the House who have stayed to take part. I shall speak about a problem that affects thousands of people across the UK—some estimates suggest that the number could be up to 3 million. It is a problem that Members, including me, have raised with the Government, but as yet, the people affected have been given nothing by way of resolution.
Inappropriately fitted cavity wall insulation might, on the face of it, sound like an issue that could be down to just a few rogue traders, but given what we now know, it is time for the UK Government to come forward with a sensible package of support for people who have felt the blunt end of Government interventions gone wrong. The scale of the problem could not be more stark. In 2018, the BBC reported that industry insiders estimated that at least 800,000 properties have defective cavity wall insulation. I want to explain why the injustice that many people in my Ogmore constituency and across the UK face is another symptom of the gross inequality across our country. I also want to tell the House why I believe that we need a new, independent body to oversee cavity wall insulation claims if the current body, the Cavity Insulation Guarantee Agency, is not able to do so.
From the outset, I want to make it clear that I am not against cavity wall insulation. If done properly, it is an efficient means of making our homes and other buildings more energy efficient, saving us power and helping to make the way we all live more sustainable. It can also help to reduce people’s energy bills—something that we all welcome, of course. In the light of the climate and environment emergency that we must address, only a fool would suggest we should not use all the tools at our disposal to make the way that we live less environmentally damaging. Cavity wall insulation can and should form part of this; that much is clear. What is less clear is what happens when our interventions bring about unforeseen consequences—unforeseen consequences that cause damage to people’s homes and leave them with a hefty repair bill.
As Members will know, most homes built before the 1970s had no form of insulation, and many were instead built with vast cavities within the external walls. Throughout the 1990s, as our awareness of energy efficiency and environmental issues expanded, the practice of retrofitting insulation in those wall cavities began to expand. Various Government schemes have followed, encouraging people living in energy-inefficient properties to have that work undertaken at a reduced or no cost to the homeowner.
I thank the hon. Gentleman for giving way; I did speak to him beforehand. He has raised this issue on behalf of his constituents, and I now want, through him, to raise it on behalf of mine. Does he agree that, yet again, something that the Government intended to be of great use to our most vulnerable and to the environment has been abused, and that the case of his constituents—and a number of my constituents—has been replicated throughout the United Kingdom? Is it not therefore right and proper for an investigation to follow the trail of businesses that are no longer in operation to secure justice for those who have been taken advantage of, and who are worse off as a result?
I am grateful to the hon. Gentleman for his intervention. Indeed, it would have been wrong for him not to intervene. I do agree with him: this is an appalling failure on the part of businesses.
I commend the basis of the Government schemes to which I referred. They were admirable in their intent—and, indeed, they still exist today—but it has now become clear that many properties that have been retrofitted with cavity wall insulation should never have been retrofitted in the first place, and that in many cases the works have been so shoddy that people have been left with significant damage to their homes.
I commend my hon. Friend for securing this debate. May I briefly cite one example that reinforces the excellent point that he is making? My constituent Mr Robert Hughes, of Gilfach, Bargoed, bought a property which, according to his surveyor, had problems involving cavity wall insulation. The Cavity Insulation Guarantee Agency said that the insulation had been fitted properly, although that was clearly not the case. CIGA refused to respond to my constituent’s concerns, and even refused to respond to his phone calls. I think that it should be examined carefully, because it is clearly at fault and is clearly not operating as it should be.
I agree with my hon. Friend. I shall say more about CIGA shortly, and about what I think could be done if Ministers were willing to intervene.
If installed incorrectly or in inappropriate properties, insulation can act as a bridge for moisture to move from the external to the internal walls, which can result in high levels of damp. Not only can damp cause higher energy bills—which is totally counter to the purpose of such schemes—but it can cause significant health issues for residents. The science tells us that regions affected by high levels of wind-driven rain are subject to a much greater risk of damp and mould-related issues. Effective safeguards are therefore vital in such areas to ensure that any retrofitting work does not make the problems of homeowners and renters worse rather than better.
Sadly, however, when we look at the map of the areas across the country that are most badly affected by wind-blown rain, we see that many of the areas in which there have been reports of high levels of cavity wall insulation complaints form an almost directly superimposable map. It is clear that something went wrong, and it is clear that unscrupulous companies have been taking advantage of Government schemes to make a quick buck.
My hon. Friend is making a powerful speech in favour of action to assist people who find themselves in this predicament—people like my constituents Pauline Saunders and Sandra Haggerty. Sandra is out of pocket owing to the cost of repairs following the installation of inadequate cavity wall insulation in her mother’s house in Rogerstone. People have lost thousands of pounds, and they need some form of compensation. Does my hon. Friend agree that they need action now, and not fine words from the Government?
I do agree. I will shortly talk about my own constituents and the problems that they have faced, including the considerable cost of any sort of repair bill. I know that very many people across the United Kingdom—arguably hundreds of thousands—need support from the Government.
I thank the hon. Member for securing this really important debate, and I invite him to comment on my view that the Government can no longer delay justice for our constituents. Some of my constituents who have been affected are widows in their 80s who have been preyed on by UK Government-approved green deal sellers, and tricked into buying, in this case, perfectly good cavity wall insulation, but on credit costing tens of thousands of pounds and lasting until they are 106 in some cases.
My hon. Friend makes a valid point, which could form part of a wider review that the Government could instigate to secure redress for the many people who have been impacted.
I shall continue—this is obviously a popular Adjournment debate. Here is where the real injustice lies. Whenever this issue is raised in the House, Members and their constituents are signposted to the supposed forms of redress. First, they are told to lodge a complaint with the firm that undertook the works. That is where many of them hit their first brick wall, because many of the firms that completed such works have either gone into liquidation, have been folded into other companies, or simply no longer exist. Many people are then told to fall back on the guarantees issued through the Cavity Insulation Guarantee Agency—or CIGA, as many people refer to it. For the majority of people I have spoken to, CIGA often represents the biggest brick wall of them all, because what that industry-funded body appears to provide in far too many cases is protection in name only. I am sure that Members across the House have been approached by constituents who have sought an assessment from CIGA, only to be presented with various get-out clauses that prevent any kind of redress payment from being issued.
CIGA rightly says that it offers a guarantee scheme rather than a compensation scheme. CIGA guarantees were offered on a 25-year basis, but now that it has become clear that CIGA had no suitable system in place to quality-assure installers, any guarantee that was given is self-evidently weakened. Quite simply, how can a product—in this case, cavity wall insulation—be guaranteed if the guarantor had no way of knowing whether the product was installed properly in the first place?
When we delve deeper, the opportunities for redress seem to weaken yet further. Significantly, one key clause in CIGA guarantees is referred to when responding to complaints: the maintenance clause. That, I would argue, is CIGA’s trump card for inaction. The difficulty that people face in attributing damp to a single cause often allows CIGA to suggest that the cavity wall insulation may not have been the key determining factor. The bottom line is often that the damp could have come from elsewhere. I am not a surveyor, and I appreciate that it may well be difficult to determine the cause of damp in a property, sometimes many years after the cavity wall insulation was originally fitted. That is a point of contention about which too many constituents have now contacted me. My willingness to support that form of defence is weakened when I hear real-life examples of people living with this problem. Indeed, one constituent who contacted me was living in a property that had been fitted with cavity wall insulation before she moved into the address, and she had located two different copies of her CIGA guarantee. One of those copies contained the maintenance clause; the other, older copy did not.
That leads me to believe that over time CIGA has taken note of the significant problems that people are facing and, instead of offering the support it was set up to provide, is instead hiding behind a clause against which it is difficult to argue. That is why I believe that the many people to whom I have spoken about CIGA often come back to me with the same response: it is under-resourced and not fit for purpose.
Then people are pointed to alternative dispute resolution, or independent arbitration. Several constituents have expressed significant concerns about how independent that process is, and many are reluctant to go down that lengthy route as, once a decision is made, it is legally binding and cannot be challenged, apart from in the High Court. The process is also expensive. It costs £130, and the complainant must pay for an independent surveyor’s report, so costs can stack up to £500. It can become, in essence, a one-way ticket to nowhere.
More recently, I was contacted by a constituent, Gavin Ward, who had cavity wall insulation fitted in April 2011. Gavin is in the Public Gallery this evening, so I would like to thank him for coming along today. Gavin owns his property and had lived there since 2001. Gavin maintains that prior to having the insulation fitted in 2011, there were no issues with damp in his property. He was door-stepped by Miller Pattison, which was installing cavity wall insulation locally, and was encouraged to have some fitted. Because he was in receipt of working tax credits the work was undertaken free of charge, with the install being funded by an energy company. Miller Pattison subsequently conducted a pre-installation survey, which proved that the property was free from damp and apparently suitable for the installation to take place. Luckily for Gavin, he retained a copy of the survey.
The installation took place and Gavin thought all was well. He sat back and waited for the insulation to start reducing his energy bills, but in the following months and years the forecast reductions in energy bills did not transpire. In fact, his bills kept increasing and he found it increasingly difficult to keep heat within his home. During this period, Gavin’s young son frequently suffered from recurring ear infections, his wife became more susceptible to asthma attacks, and Gavin himself suffered from chest infections each winter—something he not fallen foul of previously.
Some five years after the cavity insulation was installed, Gavin noticed some damp appearing. Then the electrics tripped out. Subsequently, Gavin found that one of the walls behind a piece of furniture was soaking wet, with what he describes as a pool of water inside the electrical box fixed to the wall. Gavin had an independent chartered surveyor undertake an assessment of his property, which indicated that the major damp issues now in his property had been caused by the cavity wall insulation. The damp problems increased yet further, and Gavin was informed that it was because the walls had now reached their saturation point, causing inevitable damp, mould, and spores.
Gavin has had a lengthy litigation battle, lasting three years, between his solicitor and the installers’ solicitor via a no win, no fee funding arrangement. During this period the property has deteriorated significantly, with no offer made even to remove the failed product from within the wall cavity. During the process he has made some startling discoveries. First, it has become clear that Miller Pattison’s initial pre-installation assessment was totally ineffective. Since the start of Gavin’s attempt to take legal action against Miller Pattison, many of the company’s assets have been folded into a new firm, Novora Building Services Ltd, which apparently is run by the same three directors, using all the same staff and assets; and Miller Pattison has gone into administration, removing the potential for legal redress.
It is clear that Miller Pattison is not an insignificant player in this: the company’s administrators have told Gavin that EDF Energy has made a claim against the company for faulty insulation work. Miller Pattison has previously disclosed that it applied for 800,000 CIGA guarantees, and commonly received a startling 40 to 50 complaints per month. The events I have described are all the more suspicious when we consider that—I have been informed—Miller Pattison’s managing director, Mike Dyson, was on the board of CIGA when the decision was made to grant the new firm, Novora Building Services Ltd, registered status. That means that Novora Building Services Ltd is now being used by CIGA to undertake remedial works in properties where similar problems to Gavin’s have occurred. Given that many of Novora’s assets were transferred from the defunct Miller Pattison, in effect the company responsible for the shoddy works is now being paid to correct some of its own mistakes.
CIGA’s clients do not get a say in who undertakes their remedial works once they have successfully settled a complaint. The remedial work is not guaranteed and other victims are now facing problems from the poor remedial work—work that is, in effect, done by the same company. Frankly, the situation stinks. I am reliably informed that Mike Dyson stepped away from CIGA in January this year to concentrate on his new company. How convenient.
Gavin has now taken this issue to Action Fraud, and it clearly needs to be investigated as a matter of urgency. This phoenixing of one company into another clearly needs checking out, because many of these phoenixed companies have changed from being cavity wall insulation fitters to cavity wall insulation extraction companies. CIGA has finally agreed to pay out on Gavin’s property, but only for the removal of the insulation, which CIGA now agrees should not have been installed due to debris in the cavity that was not identified in the pre-install survey. Currently, no one is overseeing how many extractions are taking place, hiding the scale of the problem further. Why is there no register? Extraction will cost only a few thousand pounds, paid directly to the installer, but that pales into insignificance given that the true cost of the repair work has risen from £45,000 to in excess of £63,000. CIGA will not agree to do any of the remedial work because, it says, the homeowner has not maintained the property.
CIGA often seem to get away with extracting material from one wall only or doing a “top up”, which is where some of the cavity’s voids are filled in. Those options are cheap and a route to disaster for the homeowner. Gavin and his family have now been forced to move out of his property, as it is uninhabitable, but Gavin’s case is just one example of many across the country where people have had to fight tooth and nail to get even a percentage of the compensation they deserve. We have seen: companies folding into other companies; and people with clear conflicts of interest sitting on the board of the supposedly independent guarantor. I am sure Members will agree that this illustrates just a small number of the hurdles people have to jump through to get the answers and compensation many of them deserve. Many other victims have not been able to sustain such a lengthy battle, and have lost their homes and health to the cavity wall insulation scandal. Pauline Saunders, who has spearheaded the Cavity Insulation Victims Alliance—CIVALLI—for many years now, has worked closely with Gavin and many other victims of this injustice. Pauline and her team at CIVALLI have helped thousands of people seek redress, and have kept the pressure on the Government in the process. I really commend her for her work on this.
I have gone through the nuts and bolts of the issue, and I want to explain why I believe it has become a real issue of inequality. Let us consider who many of these schemes are widely offered to: people on working tax credits; people on disability benefit; and people on other qualifying forms of welfare. The truth is that many of the people facing high repair costs to their properties are those who can least afford it, which is why it is vital that the UK Government step in and help to resolve this mess, once and for all.
So, today, I want to ask several key things of the Minister, which I hope he will properly consider in the spirit in which they are meant. Will he initiate an independent inquiry into the way cavity wall insulation complaints have been handled, to determine the scale of the problem and find resolution for people who have been left high and dry? Will he allocate more resources to CIGA to enable it to properly compensate guarantee holders where there is a clear need to do so? CIGA has only £18 million of assets, which is grossly inadequate. Failing that, will he set up a new, separate and properly independent body to deal with complaints about cavity wall insulation, with funding to compensate people where clear injustices can be found? Will he meet Action Fraud to ensure that it has all the resources it needs to properly investigate companies such as Miller Pattison? Will he work with the Welsh Government to ensure that any such measures are made as accessible as possible to people across Wales, as well as across the rest of the UK? Will he comment on the Each Home Counts review and whether all of its recommendations have been taken forward and have started to improve the situation for future consumers? Will he determine how many companies have undertaken cavity wall insulation works under Government schemes that no longer exist and suggest how this problem can be addressed?
I appreciate that much of the detail of what I have gone through today is quite dense, but that just shows what a rough time people in my constituency and across the UK have been having. They have been left, largely on their own, to navigate this increasingly complex situation, and all because they thought they were doing the right thing. This is not about adding to the “claim culture”, which becomes rife in too many parts of our economy; it is about giving people such as Gavin and his family proper access to redress mechanisms when there is clear evidence that they have been wronged. Many people have said that this issue has the potential to be as big as the payment protection insurance scandal. I agree, except that we now need a proper mechanism to be put in place to allow the victims of this scandal to be compensated, as the victims were with PPI. I thank the Minister for listening to the concerns I have raised today, and I hope to continue to work with him on this issue in a constructive manner.
I thought that was an informed and well-researched speech, so I thank Chris Elmore for it and congratulate him on securing this important debate. I found one phrase in his speech particularly engaging, as it sums up what we are doing in this House, and that was when he referred to “proper access to redress”. That is a universal theme in this place. All constituency MPs feel that we want to give our constituents proper access to redress, and it was a very fair observation.
The Government acknowledge the charge that some companies have installed CWI in homes that were unsuitable for those measures and that they have done so using poor building practices. We also acknowledge that some of these companies have, as the hon. Gentleman suggested, gone into liquidation, which has meant that they have avoided any redress to former customers. But it is precisely for those reasons that from
Let me give some background. Cavity wall insulation has in the past been delivered through several Government schemes, which the hon. Gentleman mentioned in passing. ECO is the most effective at protecting consumers. The hon. Gentleman will appreciate that some of the schemes did not work, which is why we are having this debate. The current iteration of the scheme, ECO3, is worth £640 million a year and will run until March 2022. Since it commenced in its first iteration in 2013, ECO has delivered nearly 2.7 million heating and insulation measures in more than 2 million households, including the installation of boilers, electric storage heaters and wall insulation.
I know that the hon. Gentleman said that he is not against cavity wall insulation but wants to raise the issue of the egregious and unacceptable cowboy companies that are exploiting vulnerable people, but I have to say that more than 8% of the homes in his constituency have received measures under the scheme and, as far as I understand it, the vast majority of them have worked out in a beneficial way. The current focus of ECO is on fuel poverty. It reduces the heating bills of those households that are least able to insulate and heat their homes. The hon. Gentleman made the point that many of the people who were exposed to these sharp practices were the most vulnerable people in our society. The ECO scheme is directly focused on that population.
In Great Britain, cavity wall insulation is present in around 70% of the homes for which it is appropriate. It reduces energy bills and saves carbon. However, I fully accept that the insulation work carried out under the predecessors of the ECO scheme did not meet the standards that are now required—I am afraid most cavity wall insulation was installed under those schemes —which is why, from the start of ECO in 2013, the Government made clear guarantees and specific installation standards a requirement, to improve consumer protection. In addition, to monitor compliance, some 5% of all the measures taken are independently checked and the result is reported to the administrator, which is Ofgem. Installers of cavity wall insulation also now have to provide a 25-year guarantee for the measures that they install.
Nevertheless, we know that standards and consumer protection can improve. The hon. Gentleman mentioned an independent review; we are implementing the recommendations of the comprehensive and independent Each Home Counts review of quality and standards. As I have mentioned, from
I fully understand and appreciate that we have had historical problems. We have consistently tried to improve standards, but we are aware that some historical installations of CWI have led to significant problems. Those problems have been seized upon by some companies that are, as the hon. Gentleman suggested, part of the evolving claims culture. There are instances of claims management companies having contacted householders directly to report that they may be able to get compensation for failed cavity wall insulation. I am not saying that this is the case in the majority of instances to which the hon. Gentleman referred, but it has been reported that householders have been led to believe that their insulation is deficient when it is working perfectly reasonably.
The Government have recently published additional guidance for consumers who suspect that they may have had faulty cavity wall insulation installed in their homes. This published guidance is useful for some people who feel that they may have been led astray. My Department is consistently working with the ECO administrator, Ofgem, the Treasury, the Insurance Fraud Bureau and the Financial Conduct Authority to explore further options for addressing this issue across the sector.
I do not know the details that the hon. Gentleman very ably set out in his speech. The first that I heard of many of them was today; I read the article that he had written and I was aware of some of the difficulties. What I would say in the spirit of candour that he adopted when he opened his remarks is that I am very happy to meet him and to discuss some of the more specific cases with which he is very familiar and with which, regrettably, I am less familiar. None the less, I do know the policy and the various schemes under which many of his constituents might have sought or had this insulation installed.
Broadly, cavity wall insulation remains one of the most cost-effective measures delivered under the ECO scheme, and we are absolutely committed to making sure that a measure of confidence in ECO and CWI continues. To reduce the chances of poor insulation, the Department continues to engage with suppliers, the industry and also with TrustMark, to ensure that continuous improvement in standards. My officials also work closely with the main provider of guarantees, the Cavity Insulation Guarantee Agency, which, when I have spoken to its representatives, has embraced the move to more rigorous standards.
It is not the place for me, as a Minister at the Dispatch Box, to comment on those specific charges about individuals. That is not what I would be expected to do. What I would be happy to do is to talk more in a private situation—one on one—so that he can explain the particular faults and irregularities in CIGA as they transpired to him.