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Cavity Wall Insulation: Government Support

Volume 745: debated on Wednesday 21 February 2024

I beg to move,

That this House has considered Government support for cavity wall insulation.

It is a pleasure to serve under your chairmanship, Mr Henderson, in this debate on cavity wall insulation. I might even say that this is yet another case of déjà vu, given that I have been here before with similar debates, in 2014 and 2017. Alas, some of the problems have not been remedied.

I will explain very briefly for those who may not be familiar with cavity wall insulation that it fills the cavity between the exterior and the internal skin of a house with a material that insulates the house and keeps heat in, and it is a commendable way of doing things, if circumstances allow. Unfortunately, in most of western Britain, where there is wind-driven rain and high rainfall, the wind drives rain in through any cracks or faults in the exterior coating of the house, and the cavity wall insulation acts as a bridge, transmitting the water into the house, which leads to damp, mould and a host of other problems. I will not go into that any further, although I have become slightly expert in the functioning of cavity wall insulation, given the number of times that I have looked at the issue.

The cavity wall insulation scheme was financed with money from the green initiatives that the Government had at the time. It seemed to be particularly targeted at people of modest means, including people who were older or disabled. In fact, I have heard many people who have had damp problems say that a man came to the door and said, “This is a Government scheme. It will save you £350 per year and it’s free. Can we put it in?”, whereupon most people said, “Yes, of course,” because they imagined that it was guaranteed, certain to work, and suitable both for their premises and for the area they lived in. Cleary, it would also better their living conditions and allow them to save energy and to do their bit on climate change.

My area is one where cavity wall insulation is clearly unsuitable; as I said, it has westerly winds, wind-driven rain and heavy rainfall. Many properties actually face the sea. In fact, in the very first case of cavity wall insulation problems that I came across, when we looked out of the front window, where the damp was coming in, we could actually see the sea. That was one of the reasons why that house had so many problems.

The system failed in many ways. I will briefly address several points; there is no point in rehearsing them, because the Minister and others are already familiar with them. When places were allegedly assessed, in too many cases cavity wall insulation was installed where clearly an assessment would have contraindicated it, for example in places where the rendering was very poor.

I do not intend to go into individual cases, because the Minister clearly cannot take them up now—they are historical—and I would be here all day if I did, but I will give some examples. I saw one house, a former council house that had been bought by the tenants, that had a piece of the front rendering about the size of a fireplace missing from the front of the house. The house was on an upland site, facing the sea, and rain was being driven at the bricks where the pointing was faulty and going straight through into the house, causing huge amounts of damp. That case was fairly typical. I asked them whether they had been assessed and they said, “No. They just came here and offered to do it, and we took it.”

Often, the installation was of poor quality. Again, I will just give a quick example. An elderly lady told me that some men came to her door late at night and said that they had one installation to do during the day, and that they were very keen to help her and so on. She was very keen to have the insulation, so they put it in for her. She said, “They were so keen—very nice lads. That they put it in using torches”—they had no lights. When people chased after the installers subsequently, they found that many had gone bust—they had closed down, or become insolvent.

The hon. Member is making a compelling argument. I commend him for his steadfast work on the issue over the years. Several of my constituents have contacted me after an insulation company canvassed and encouraged them to have insulation installed in the cavity walls of their homes through the green homes grant. They have since discovered that the insulation installed was entirely inappropriate for their properties, and they are now experiencing damp and mould. One constituent told me that CIVALLI—the Cavity Insulation Victims Alliance—has estimated the cost of damage to her home at about £120,000, which is substantial considering that the average cost of a home in my constituency is around £180,000.

In pursuing compensation for damage, several of my constituents engaged the services of a law company called SSB Law on a no win, no fee basis. After SSB Law fell into administration, the lawyers of the insulation company sent letters to my constituents demanding that they pay legal fees that could amount to tens of thousands of pounds. This is, quite frankly, a scandal and a disgrace, as not only do they now have considerable damage to their homes, but they have to pay the additional legal costs on top. With cowboy companies using Government grants and public funds to install unsuitable insulation that causes damage to homes, does the hon. Member—and, indeed, the Minister—agree that there must be an urgent investigation by the Public Accounts Committee into the misuse of public funds by these insulation companies?

I am grateful to the hon. Member for that point; she makes the case succinctly. My area and other areas in Wales are known as legal aid deserts, and that encourages people to seek out no win, no fee companies. In my area, we tend to go to Merseyside, Manchester, Birmingham and even London—these companies are uncontrollable. The circumstances she outlines are tragic and costs of £120,000 are quite extraordinary, but the damage can be very large scale indeed.

I have asked in the past about the review of installations—whether they were inspected. Allegedly, 5% were, but to be frank, I have scarcely come across a single case where an installation has been inspected, found to be defective and resolved. I am not saying that that does not happen, but I am sure it could be done much more effectively.

There is so much that I could say. Another interesting point is that cavity wall insulation was specifically excluded from building standards when it was brought in under the scheme, so given that local authorities are not responsible, people cannot get redress in that way either.

Members might know that there is a guarantee scheme, but many of my constituents who have tried to claim have found the process quite difficult. The victims groups CIVALLI tells me that there have been rumours, although it has not been officially confirmed, that the main guarantee provider, the Cavity Insulation Guarantee Agency, has had financial difficulties because of the number of claims. Perhaps I will talk about that later if I have time. One complaint is that the small print of the guarantee says that the place in question must be properly maintained, but many people who had cavity wall insulation installed were older or suffered some disability, so were scarcely in a situation to climb up ladders to look for micro-cracks in the rendering of west-facing walls. That maintenance clause became very prominent in the refusal to take matters further. As someone once said, the large print giveth and the small print taketh away. That has certainly happened for some people.

Let me turn to removal and repair. CIVALLI says that installation and extraction should be done by separate providers, each with proper accreditation, for example by TrustMark or Oscar. The scheme was set up with insufficient supervision, which allowed in what I can only call cowboy installers—those who sensed that there was money here, but who subsequently disappeared or went bust. Removal is not easy. For example, I have had cases of people having stuff removed twice, and in one case it caused dry rot as well. The dry rot was attended to twice, and when the owner came to sell the house, although the probable price was about £180,000, I think she got about £50,000, because the problems were still there.

CIVALLI has done heroic work to try to get something done, but outstanding cases remain, as I outlined in my speech on 19 April 2017. The Minister at the time told me that CIGA said that there were 3,663 recorded cases, of which it had resolved 2,939, while 724 had been resolved by installers. I am interested in the number and prevalence of cases, because although I have come across a great many in my constituency, I have seen no official estimates of how many installations were carried out in the first place, how many people then found them to be faulty, how many have sought redress through the guarantee schemes, or how many of those cases were successful. Those basic facts would be useful.

My researcher found that CIGA says that the number of claims under that scheme are declining, from 4,806 in 2018 to 2,300 in 2023, but obviously there are many claims left, and there is a question as to whether they have been settled satisfactorily. I would be interested to hear any assessment by the Government of the number of remaining cases or of the cost of remediation. The hon. Member for Bradford South (Judith Cummins) mentioned the figure of £120,000. I have no idea how much the cost will be, but even £10,000 is a great deal of money, and the victims are probably in no position to pay.

I would also be interested in the demographic make-up of the group of victims, so that we can get a grip on the size and nature of the problem. Are they, as I suspect, older and disabled people—poorer people, actually, some of them? One must also ask what the victims actually want. I am in no position to say, but I would guess that they definitely want the damp fixed, the dry rot fixed, if there is any, their homes restored to their previous standard, and an acknowledgement of fault—an acknowledgement that they are victims and that they have done something that should not have led to this situation. As I said, people subscribed to the scheme thinking that it would save them money and that they would be doing something about climate change.

I have asked the Minister a number of practical questions that I realise she cannot answer today, so I would be glad to hear from her in writing on some of these points. However, I think that ultimately the Government should shoulder what is their own responsibility. That would be the right thing to do and would also counter any lack of confidence in other green schemes in the future, which is obviously a potential problem. CIVALLI is calling on the UK Government to take direct control of CIGA and ensure that it offers proper remediation to victims, not cash compensation. People want their houses fixed; it is not a matter of money. CIVALLI also says that victims should be able to have an accredited surveyor visit their homes to do a proper audit, and that if they have been identified as victims of improper cavity wall installation, they should have access to Government funding.

As I said, I have no idea how long this piece of string is—how big the problem might be—but I was interested to see the case of Fishwick in Preston, where external insulation was fitted with damage to homes and danger to residents. The cost of remediation was huge, but the installers have disappeared. I understand that National Energy Action was able to get involved in that case and put in the appropriate work. I will not go into the report that I have had, which is rather long, but the case of Fishwick might set a precedent for residents not being held responsible. I would be glad if the Minister could say something about that now or in writing.

I do not know if any of this is possible. Whatever is done is long overdue. Is it not time to establish a quick independent inquiry into the botched CWI scheme, and for that to be the basis for early and full remedial action, whatever that might be? People are still suffering. As I said, I made my first speech in this place on the issue in 2014 and, though things have changed to some extent, there are still victims, and I think they are the people least able to fight their own cause. Somebody needs to take responsibility.

It is a great pleasure to serve under your chairmanship, Mr Henderson. I thank the hon. Member for Arfon (Hywel Williams) for his passionate speech and for his case studies reminding us of the individuals affected in these houses, who have to live with these issues daily. I thank him sincerely for raising the matter.

As the Minister responsible for energy affordability and fuel poverty, I have often said that the greenest energy is the energy that is not used. That is why insulation is so important. We must ensure that customers do not see their money vanish literally through their walls while they are living in cold properties. Improving the energy efficiency of homes is central to the Department, as are helping people out of fuel poverty and achieving net zero.

When correctly installed, cavity wall insulation can reduce the amount spent on keeping a house warm, which is critical to alleviating fuel poverty. It can also make homes readier for a clean heat source. Insulation is one of the most cost-effective means of improving household efficiency. The Government have an ambition to reduce by 15% on 2021 levels the UK’s final energy consumption from buildings and industry by 2030. We also plan to ensure that as many fuel-poor homes as possible achieve an energy performance certificate rating of C by 2030.

I will cover three areas—schemes, safeguards and standards—and the questions that have been posed. Cavity wall insulation has been installed under previous Government schemes and continues to be installed under the home upgrade scheme, the social housing decarbonisation fund, the energy company obligation and the great British insulation scheme. According to the great British insulation scheme’s final impact assessment:

“At the end of December 2022, it is estimated that there were around 5.1 million homes without cavity wall insulation in Great Britain, of which 3.8 million are easy to treat standard cavities”.

I turn to safeguards. As the hon. Member quite rightly pointed out, we debated cavity wall insulation in 2017 and 2020, with many examples occurring before the change to consumer protections.

The Minister is being generous in giving way. Several of my Aberavon constituents are fighting to get justice after cavity walls have been incorrectly or inappropriately installed, and real damage has been done to their homes. The companies have disappeared and no longer exist, and this Cavity Insulation Guarantee Agency does not seem to be working at all. It has cost my constituents tens of thousands of pounds, and years of stress and worry. Will the Minister set out what is going wrong with the CIGA and what steps the Government will take to help my constituents to sort out this absolutely appalling problem?

The hon. Member makes an important intervention. Although it is not within my portfolio, I will absolutely get back to him with as much detail as I can on individual cases and pass them on to the relevant places.

I am sympathetic to the points raised by the hon. Member for Arfon and others about the need for a better understanding of the scale of the problem. At the moment I do not have those figures, and in all honesty I am not sure whether I will be able to get them, but I will certainly endeavour to find out the number of people affected by the issue.

As hon. Members have rightly mentioned, the issues have arisen as a result of poorly executed installations of cavity wall insulation, of which I am very much aware. Unfortunately I do not have a full view of the number of failed installations. Our understanding is that it is a relatively small proportion, but that does not justify it; even if it is a small amount, we should be looking at it. We need to take on board the situation and think about how we can improve. I will refer later to what we have done to make improvements so that this does not happen again.

I want to address the genuine concerns raised by the hon. Member for Bradford South (Judith Cummins). Claims management companies and firms of solicitors have contacted consumers offering to represent them in return for compensation for the damage caused to their homes by the installation. It should be noted that not all those companies have the consumer’s best interests at heart, and some have left consumers facing extensive legal fees. I thank the hon. Member for bringing that to my attention.

To assist consumers who suspect that they have had faulty cavity wall insulation installed in their homes, the Department published guidance in October 2019. I urge customers to follow that guidance to avoid becoming victims of fraudulent cavity wall insulation claims, and for information on organisations that can offer support if a problem arises.

We have put standards in place for the protection of consumers. Energy-efficient measures installed under current Government schemes include the energy company obligation and the great British insulation scheme, and they must comply with the requirements outlined in the British Standards Institution’s good practice standards, set out in the PAS 2035 document. That requires installers to be certified to PAS 2035 standards for any energy-efficient measure including cavity wall insulation, demonstrating a high level of competence. Those standards will help to ensure that an installation is suitable for the property, as the hon. Member for Arfon described when he talked about the way the wall was facing. They will ensure that it is to the highest standards, while also improving the service provided to the consumers.

I commend what the Minister is saying and what has been done. One of the problems that has bedevilled this matter is the unwillingness of anybody with any power to look at historical cases. The 2016 Bonfield report specifically said that it was not looking at historical cases, but it is the historical cases that are egregious and difficult. I commend the Minister, but eventually we must look at historical cases as well.

I thank the hon. Member for making that point. Where consumers have concerns or are unhappy with work that has been carried out, they should contact the installer, although I recognise that some of the installers in the historical cases that we are talking about no longer exist. The insurance-backed guarantee provider offers a second layer of protection, for example in cases in which the installer has ceased to trade. We agree that the industry does not always get it right, and I encourage the industry to provide appropriate remedy for the affected customers.

By mandating the requirement for installations under Government-backed schemes, and ensuring that TrustMark and PAS 2030 businesses undertake the work, we have helped to improve the quality of installations since 2019. We are fully committed to protecting all consumers who have insulation products installed in their homes, as well as improving the overall consumer journey regardless of housing tenure or how installation work is funded.

I thank the hon. Member for Arfon for raising questions about individual cases. I will follow them up in writing; if there any we could look at specifically, I am happy to take them away. I encourage other hon. Members to raise such cases.

I also welcome recent research by the Competition and Markets Authority and other organisations such as Which? and Citizens Advice on consumer protection in this sector. Today the CMA published an update to its report on consumer protection in the green heating and insulation sectors. In response, the Government have announced the work that we are undertaking to improve consumer protection in the green heating and insulation sectors.

I thank the hon. Members for Arfon, for Bradford South and for Aberavon (Stephen Kinnock) for their contributions. As I say, we must remember that these are people’s houses that we are talking about—they are the homes that people live in. If there are any individual cases that we should look at, I encourage hon. Members to send them on to me.

I thank the Minister for taking on what is not an easy brief. This is a complicated, long-standing problem. I am grateful for her remarks, and I look forward to hearing from her colleague in another place with more direct responsibility.

I am also grateful for the Minister’s offer to look at historical cases. I was going to raise some, but time has defeated us somewhat. My constituents Mr and Mrs Williams, from Penisa’r Waun outside Caernarfon, have been fighting for 10 years to get their cavity wall insulation sorted out. I am sure that I will be coming to the Minister with their case and possibly others.

The hon. Member for Bradford South (Judith Cummins) made a point about legal help, which is problematic. It is a specialised field, but there are no legal resources in my area. Possibly there are none in south Wales or the north of England—that is perhaps a wider question. I am glad to say that the law department at my own university in Bangor will hopefully be providing a pro bono service. That will certainly not solve the problem, as they are not qualified lawyers, but we have to look for help wherever we can find it.

Thank you, Mr Henderson, for chairing the debate. I thank other hon. Members for taking part.

Question put and agreed to.