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Cavity Wall Insulation

Volume 587: debated on Wednesday 29 October 2014

It is a great pleasure to serve under your chairmanship, Dr McCrea. I applied for the debate because I have come across a number of cases in my constituency where it is alleged that cavity wall insulation has been installed when it should not have been, first because of the climate, which in my constituency is primarily heavy rainfall and prevailing wind-driven rain. I understand that my constituency is a category 4 area—an area in which cavity wall insulation is unsuitable.

In preparation for this debate, I spoke to an industry specialist with decades of experience, and he told me that in his area of the west of England, they just do not install cavity wall insulation at all. I gather from him that the prevailing weather in his area is less extreme than that in mine. My constituency is coastal and mountainous. It faces prevailing westerly winds and we have very heavy rain. I have a number of questions for the Minister, one of which is whether cavity wall insulation should be installed in category 4 areas such as mine that have wind-driven rain.

The 2012 Office of Fair Trading report on the matter contains a great deal of interesting information. If I may be forgiven for quoting at length, page 52 of the report states:

“Consumer magazine Which? reported in April 2011 that it had invited eight companies to assess for cavity wall insulation (CWI) a house that its expert surveyor deemed unsuitable for this due to cracks in the external walls and its location in an extremely wet and exposed area”.

That is typical of many of the houses in my area of north-west Wales. The OFT report continues by stating that those are factors that

“industry guidelines warn could lead to damp in houses with CWI. All eight said the house was suitable for CWI and none warned that CWI might put the house at risk from damp.”

That was in 2011, so I accept that industry practice may have moved on, but that is an important point to make at the start of my speech, because I am mainly concerned with a number of historical cases of cavity wall insulation being installed 25 years ago, say, and people now wondering what redress they have as the system fails, or at least as they suspect that the system is failing.

Secondly, I have been repeatedly told of cases where cavity wall insulation has been installed inappropriately—this is perhaps the main point—given the condition of the building, especially if the rendering was cracked or missing. Buildings vary from area to area, of course. Some places have pointed brickwork, but in my area pebbledash and smooth rendering rule supreme, and they are of course subject to cracks. Once a crack appears, water can get behind the rendering and make its way into the building if the gap between the interior and exterior skins has been bridged by cavity wall insulation. That is the nature of buildings in my area—people pebbledash their houses because of the rain.

Thirdly, I have been told of cases where cavity wall insulation was installed badly and with a low standard of workmanship, leading to cold spots in houses. Essentially that means that when the material was pumped in, some areas were missed, so that, perhaps in the middle of a wall, there was an area with no cavity wall insulation. That area is literally a cold spot, and condensation and subsequent fungal growth are suffered haphazardly in the middle of the wall. People are surprised by that condensation because they have insulation, and they cannot understand why it happens. It is rather difficult to remedy that situation. I understand that the system involves drilling from the outside and literally patching the inside by pumping in more material. That is clearly far from satisfactory for the householder, although it might be an effective remedy.

In one case, a householder’s internal plastic cladding made it difficult to assess the location of the cold spots. He had obtained ribbed plastic cladding from a DIY store, as he thought that that would prevent further damp, but in fact it prevented him from seeing where the damp was. That is just one case, of course, so I am not making a general point.

Other constituents have told me that they are considerably worried about water penetration and damage in areas of their house that they cannot access either because that is difficult, or because they are now older or infirm. They might have had the cavity wall insulation installed 10 or 15 years ago, perhaps when they were in their 50s and renovating their house with a view to retirement, and they are now not in a condition to clamber into loft spaces. One lady said that she suspected that she had damp that was caused by cavity wall insulation, but that it was in the cupboard under the stairs. She had not been in there for a while, so I had a look. It was quite black, and the damp was in a very inaccessible place.

I have also been told that although some installers had accepted liability and tried to do something about the damp, their remedial action had been ineffective. In one case, such ineffective remedial action allegedly led to dry rot because water was coming into the house across the bridge of the cavity wall insulation and encouraging that rot. The installers, to their credit, removed the cavity wall insulation—thoroughly they thought—and then employed a specialist company to remove the dry rot, but my constituent tells me that the dry rot has returned, as it is wont to do. She has now decided to take the matter through the courts, but her case is an exception.

I have also been told that some of the remedial action has been carried out to a low standard of workmanship. I recently visited a house on a council estate in my constituency, and as I approached, I saw that the pebbledash rendering was clearly patched—I thought by someone with their eyes closed in the dark. It was clearly a terrible job. There were patches of about 1½ square feet on which there were no pebbles and the appearance of pebbledash had been achieved by making indentations with fingers so that it looked vaguely like the pebbledash next door. The elderly lady who lived there was at her wits’ end and did not know what to do.

In other cases, liability has been denied. Although householders are convinced that their damp problems are caused by cavity wall insulation, the installers have either gone bust or closed down, or the people who have taken over the companies deny any liability. When people appeal through the industry guarantee scheme, they believe that it operates with a very high bar that prevents proper redress in what they see as a legitimate case. The scheme makes an effort to be accessible, and I am sure it acts to proper standards, but my constituents have faced a difficult experience, which might be because some of them are elderly or infirm, or just not familiar with negotiating their way through official-ese. The 2012 OFT report criticised the industry guarantee scheme, and I am not sure whether measures have since been taken to improve the situation.

One company, to its credit, has worked well with me. We have reached a conclusion on some cases, while it denies liability in others. A number of cases are pending or have been referred to the industry guarantee scheme—the Cavity Insulation Guarantee Agency. However, the experience is very unsatisfactory for my constituents, who thought they were doing something good by installing cavity wall insulation, but found that that was not to be the case. The company, which I will not name, was not originally directly involved in the insulation scheme. It took over another company that had closed down, so the practice was not its primary responsibility. Another company that was working in my area has closed down, so any claims for compensation or redress must presumably go to CIGA, the industry-wide body, although there might be problems with doing that.

The situation causes less tangible effects, which some people say are more damaging to the individual than the building. People suffer long-term worry about what will happen to their homes and the possible costs of repair, as they might not be able to afford repairs or clamber into attics. We know that long-term worry has an effect on people’s physical health.

It is alleged that direct health effects arise due to the growth of mould. When I was considering what to call this matter—for the file, as it were—I thought of the Welsh phrase “waliau du”, which means “black walls”, because that is literally what is happening: people’s walls are turning black, and they do not understand why. I have been told that mould growth can worsen children’s asthma.

I must note that my constituents are really bemused, because they were urged to insulate their houses and install double glazing only then to be advised that to avoid condensation, they should leave their windows open. It is peculiar to give people such advice in mid-winter, because by letting out the steam, they also let out the heat that they have taken such steps to conserve.

My constituents believe that they have no means of redress—whether they do or not is another matter—and cannot afford to take civil action. The local citizens advice bureau works hard, but its resources are extremely limited. I have contacted the trading standards office of my local authority, Gwynedd county council. It has taken up some cases, but not all, and not all that have gone forward have been successful. Many of the people affected are of modest means. They were just trying to better their living conditions, to save energy and to do their bit on climate change. The insulation programme began in the 1980s, so people are coming to the end of their 25-year guarantee period without knowing whether their system is still viable. Those people are 25 years older than they were when the cavity wall insulation was installed, and so are less able to pursue their cases.

I came across the case of a young family who bought their house a few years ago only to find later that the cavity wall insulation was failing. However, the installer is unknown, as the installation took place a long time ago and no paperwork came with the house. The family think that they have cavity wall insulation—the walls are black—but they know nothing else. Their case is pressing, because they think the insulation was installed 25 years ago, so if there is a guarantee, it will be coming to an end.

My general point is that my constituents subscribed to what many thought, rightly or wrongly, was straightforwardly a Government scheme. Some were told that by the installers, while others assumed that, as the Government were funding the installation, the system was safe and effective, and that the installers were operating to an appropriate standard of practice. The OFT’s 2012 report noted that some people assumed that the installers’ practice was regulated and inspected, and that appropriate quality assurance measures were in place. Those people feel let down and believe that somebody—albeit an ill-defined somebody—should take responsibility.

The Government’s frankly disappointing response to the OFT’s report concentrates almost exclusively on the green deal—I understand why, as it was being put in place—but pays scant attention to the historical problems that concern me today. The OFT emphasised the importance of cavity wall insulation, saying:

“The home insulation sector had a value of around £700-800 million in 2010…Insulation can create important benefits for consumers”.

I do not decry insulation by any means; it is a very good thing. The OFT also said that

“if poor installation causes problems with damp, these may not become evident until a year or more after installation. Monitoring, which is typically done in the weeks following installation, cannot identify these longer-term problems…In relation to regulatory monitoring, Ofgem requires the energy suppliers to inspect five per cent of installations and provide a summary of these inspections to Ofgem.”

Is 5% sufficient? It is only one in 20. I have come across so many cases in a small town that I, a complete layman in these matters, suspect that a more intensive quality assurance system is needed.

Respondents to the OFT raised four issues, including, first, the quality of installation—whether it was installed to a high quality and in suitable premises—and, secondly, whether there is an adequate mechanism for redress if things go wrong. The OFT noted its

“concerns that, although offering an important source of redress, the current arrangements for consumer redress for faulty installation of cavity wall insulation could be improved.”

As I said, the Government’s response concentrated on the green deal.

After this debate was announced, I was contacted by Councillor Brian Heading of Belfast city council—you might know him, Dr McCrea—who told me that cavity wall insulation was widely installed during the housing boom in Ulster. He said that those private and public sector houses are now 30 to 40 years old and in need of renovation, including through the removal or updating of insulation. He told me that he knows of no body that systematically checks the condition of cavity wall insulation properly to assess the scale of the problem. He was keen to say that he suspects that European money is available to the devolved Assembly under the energy programme, so I must ask the Minister whether that is true. He is keen to access any source of money to take the matter further.

Finally, I have also been contacted by representatives of a company in Lancashire that has a patent process for insulating houses from the outside with a coating. It also removes cavity wall insulation, albeit with difficulty. Full VAT is payable on its services but, in the company’s view, it would be reasonable to charge the lower rate. I concede that this matter may be for the Treasury, rather than the Minister, but I think it is a fair point. At the 2008 ECOFIN meeting in Helsinki, it was decided that countries can reduce the VAT rate from 20% to 5% for labour-intensive industries. The removal and renovation of botched cavity wall insulation would seem to be a prime candidate for a VAT reduction.

I will be grateful for the Minister’s response to my points, although I concede that I have made many of them. If she cannot respond today, I will be glad to receive a written reply when she has had time to consider the matter further.

I congratulate the hon. Member for Arfon (Hywel Williams) on securing this debate on a subject that is very important to his constituents and to people suffering from cold homes generally.

The Government recognise that improving domestic energy efficiency helps consumers control energy bills and reduces fuel poverty. Of course, it also contributes to our challenging carbon reduction targets. We aim to reduce greenhouse gas emissions by at least 80% below 1990 levels by 2050. To drive up domestic energy efficiency, we have put in place a long-term and progressive programme focused on enabling consumers to improve the energy efficiency of their homes. We have set ourselves a target of ensuring 1 million homes make energy efficiency improvements by March 2015. The programme is innovative: the energy companies obligation, the green deal, the green deal home improvement fund and the renewable heat incentive are all world firsts. It takes time to establish and embed new markets, and to understand how incentives can work best with the grain of the market and in tune with our great diversity of households.

We have made significant progress. In total, around 797,000 homes had been improved by the end of August this year. There is still much to do and our programme reflects key underlying challenges: much of the easy energy efficiency work has been done; nearly all homes have had at least some loft insulation, although many could benefit from having it topped it up; and most of the easiest cavity walls have been filled. However, we need to move away from a culture of unsustainable grant-dependency to a different model—a more market-based approach. Our long-term aim is for consumers to be motivated to improve their homes and to be ready to meet some of the costs, with real and effective help for the most vulnerable. This is good for all bill-payers as subsidy goes where it can have most effect, and good for our economy as innovative businesses enter the market and develop better and cheaper products.

That is especially important as we start to tackle more expensive improvements, such as solid wall insulation. Only around 3% of about 8 million homes with potential solid wall insulation have been done, and yet the carbon saving from such improvements can be 10 times that of loft insulation. These challenges are not confined to the UK; other countries are closely watching what we are doing.

Cavity wall insulation has been a hugely popular measure, with around 2.6 million installations taking place under the predecessor to the ECO—the carbon emissions reduction target—between April 2008 and April 2012. Also, cavity wall insulations have accounted for 36% of all measures installed under the ECO.

Cavity wall insulation can be a highly effective means of improving the energy efficiency of homes, offering the potential for an average of 10% in energy savings. The vast majority of installations in homes have been successful and one leading industry body estimates that less than 1% of cavity wall insulations have caused consumer dissatisfaction. I know that British Gas is one firm that is now offering to install cavity wall insulation for free in nine out of 10 suitable properties, regardless of whether the occupant is a British Gas customer. This is a huge opportunity for consumers who could benefit from this measure.

However, it is important to recognise that cavity wall insulation is not suitable in certain areas of the UK, for example areas where wind-driven rain is prevalent, owing to increased exposure. The official British standard wind-driven rain index highlights the constituency of Arfon and surrounding areas as being high on the index, so the hon. Gentleman’s concerns about the suitability of properties in his constituency for cavity wall insulation may be well-founded.

Dampness in properties with cavity walls is almost always caused by rain rather than condensation, unless there is a problem with internal wall insulation. Rain gets into the cavity via a poorly maintained external wall—for example, rain can leak down pipes, gutters or poor pointing.

To establish whether cavity wall insulation should be installed, pre-installation surveys are essential, and the quality of the external brickwork is very important in areas of wind-driven rain. Surveys of the proper quality and robustness will identify those properties for which cavity wall insulation is suitable. Where cavity wall insulation is recommended, correct installation is of the utmost importance, as is the ongoing maintenance of the property. If these conditions are met, cavity wall insulation will be effective.

I am not in a position to comment on individual cases, although I appreciate that the hon. Gentleman specifically did not give any. However, I recognise the distress that this problem has caused a number of householders; we have corresponded on the matter. It may be helpful if I outline the consumer protections that are in place and the redress route for consumers.

The installation of cavity wall insulation must meet the requirements of the statutory Building Regulations 2000. The materials used to insulate cavity walls are also subject to specific standards. There is a range of qualifications and training for installers, but installers should follow British Board of Agrément or British Standards Institution regulations. Under the green deal and ECO schemes, installers must undergo a rigorous authorisation process to become authorised participants. They must then comply with a publicly available specification, which sets out requirements for the installation of energy efficiency measures in existing buildings, including cavity wall insulation. Furthermore, as the hon. Gentleman said, Ofgem requires ECO installers to contract independent inspections of 5% of all measures installed, including cavity wall insulation, to ensure that they meet required standards.

All insulation material installed under ECO’s predecessor scheme—CERT—was required to meet the regulations of the BBA or another UK Accreditation Service-accredited technical approval body for their thermal performance. In addition, all installers should have undertaken an inspection of the property to determine its suitability for cavity wall treatment. Moreover, all cavities insulated under CERT should have received a Cavity Insulation Guarantee Agency 25-year guarantee. This guarantee offers the assurance that defects will be fully investigated and rectified free of charge where that proves necessary, and I point out to the hon. Gentleman that the guarantee outlasts any company that may be liquidated.

I now turn to the general area referred to by the hon. Gentleman—his constituency and the surrounding areas. If the measure was installed under one of the predecessor schemes to the ECO—CERT or the community energy saving programme—consumers must first rely on the 25-year CIGA guarantee. If more than 25 years have passed, I recommend that the constituents consider seeking a new scheme, or going to their energy supplier to see what assistance it might be able to offer. If there is no effective guarantee in place, the energy company that originally funded the measure can be approached; it may be able to assist. Ofgem may help to trace that company. If Ofgem cannot help, a consumer may obtain further guidance from a local trading standards office or seek professional legal advice.

For vulnerable or low-income consumers, Citizens Advice may prove a useful contact. I note that the hon. Gentleman referred to his local citizens advice bureau. Nevertheless, if a group of citizens in his constituency are particularly affected by this issue, Citizens Advice might be a helpful sign-pointer or might give additional advice about other sources of support if it feels that the guarantee has not been properly looked at.

On learning of the hon. Gentleman’s concern about his constituency and the surrounding areas, staff in my office made inquiries and they have assured me that they have engaged with complainants on a case-by-case basis, and with the energy companies involved, and considered liability where that is appropriate. If he would like to pass me details about certain cases, I will take this issue up with CIGA, to ensure that the energy company responsible sticks to its obligations. I also understand that he has been in contact with CIGA; if he needs any assistance with that process, we will be delighted to follow up.

Cavity wall insulation is one measure that consumers can utilise to improve the efficiency of their homes. The successful implementation of our programme is dependent on encouraging consumers to take decisions to retrofit their homes with a range of measures that they can trust to deliver savings in energy consumption and in bills. I suggest that the hon. Gentleman encourage his constituents to consider other measures that may assist them in keeping their homes warmer for less.

We have put in place a robust framework that defines what measures are legally eligible for use within the green deal, alongside a robust methodology for estimating the savings that can be realised. To ensure that we are promoting the maximum number of energy efficiency measures possible and taking account of developments in energy efficiency product technology, we are committed to keeping our framework under review.

Earlier this year, we amended the Green Deal (Qualifying Energy Improvements) Order 2012 to allow two additional energy efficiency improvements to be installed under a green deal plan: more efficient circulator pumps; and storage waste water heat recovery devices, which are attached to baths or showers. Additional measures will also be included soon. There are energy efficient luminaires, including the first use of modern LED lighting in domestic properties; the use of replacement glazing panels for double-glazed windows; party wall insulation; and more efficient storage heaters.

My Department recently took over responsibility for household appliances. The cost of running household appliances has tumbled and in some cases halved, as tougher minimum performance standards have led to industry innovation and more and more energy-efficient products dominating the market.

Looking ahead, the smart meter roll-out will be an investment programme to modernise our outdated metering system and bring it into the digital age. I hope that when the hon. Gentleman’s constituents have their smart meters installed, it will make them more inclined to be aware of the opportunities for energy-saving devices and installations that are still around, which we hope can help them to make their homes warmer for less. The programme requires energy suppliers to complete the roll-out of smart meters to domestic and smaller non-domestic premises in Great Britain by 2020—