Cavity Wall Insulation

Alan Whitehead Excerpts
Tuesday 26th March 2024

(1 month, 4 weeks ago)

Westminster Hall
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Alan Whitehead Portrait Dr Alan Whitehead (Southampton, Test) (Lab)
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I congratulate my hon. Friend the Member for Halifax (Holly Lynch) not only on securing this important debate but on making the detailed case that needs to be made about his scandal. The contributions of hon. Members from across the Chamber have added to her exemplary presentation, and have underlined the urgent need to do something about the issue. My hon. Friends the Members for Blackburn (Kate Hollern) and for Bradford East (Imran Hussain) and the hon. Members for Tiverton and Honiton (Richard Foord) and for Strangford (Jim Shannon) all made first-class contributions to the debate.

Cavity wall insulation has played, and will continue to play, a tremendous role in keeping people’s homes warm, reducing bills, fighting fuel poverty and uprating homes so that they are fit for a low-carbon future. Indeed, the vast majority of cavity wall insulations work perfectly well and do a good job for the homes where they are fitted. Of course, cavity wall insulations need to be done with the right materials, by the right people, in the right places and according to the right standards. I regret to say that there are circumstances—rather more in the early days than now—where those criteria were not adhered to, and problems arose with properties in which cavity wall insulation had been placed.

Pauline Latham Portrait Mrs Pauline Latham (in the Chair)
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Order. Could you face this way?

Alan Whitehead Portrait Dr Whitehead
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I am sorry, Mrs Latham. One would think that, in a reasonable world, there should be speedy recognition that the problem has arisen and an equally speedy arrangement whereby the person in whose home the problem has arisen can get restitution for what has happened, in terms of both compensation and putting right what has gone wrong with the cavity wall insulation.

The Cavity Insulation Guarantee Agency came into being in 1995. As hon. Members have mentioned, it provides guarantees for cavity wall insulation. There have been 6 million since it was set up, over a 25-year period. The agency has a good record of ensuring that redress is carried out speedily and properly, where problems have arisen.

Unfortunately, not everybody knows about the agency or has had their wall insulations guaranteed through CIGA. Indeed, they might have had cavity wall insulation installed before guarantees came into place. The picture today is quite good regarding guarantees, but that does not remotely address the problem before us this afternoon. As my hon. Friend the Member for Halifax said, this is essentially a scandal on a scandal. It is the problem of cavity wall insulation going wrong in a certain area. When it does go wrong, several cases often appear in certain areas because the installer—

Pauline Latham Portrait Mrs Pauline Latham (in the Chair)
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Order. Could the Opposition spokesperson address the Chair?

Alan Whitehead Portrait Dr Whitehead
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Yes, I am sorry; I keep doing that. The appearance of a number of problems in a particular area might relate to a particular company carrying out faulty insulations or using the wrong material, whereas in other areas no such events will occur.

Scandal one is that a relatively high number of deficient cavity wall insulation arrangements came to light in a particular part of the country. Scandal two is that a parasitic law firm decided to make a good living by zealously pursuing people it thought might conceivably have a claim for failed cavity wall insulation, and tried to push those people down a path to restitution in a wholly cynical and unacceptable manner. I am pleased to hear from my hon. Friend the Member for Halifax that the Solicitors Regulation Authority is investigating that company, SSB Law, but that does not address the fact that other firms also pursued that practice. Ironically, SSB Law took over a number of claims from a company that had pursued this model and gone bust in the process. One might say, therefore, that it is a scandal, upon a scandal, upon a scandal.

The way this worked is set out in a letter from CIGA to my hon. Friend the Member for Halifax, which describes how the model operated.

“Claims lead generator often unqualified promises large payouts if homeowner signs up to pursue a claim for failed cavity wall insulation.

Details passed to a RICS surveyor who does not visit the property but prepares a claim schedule based on detail provided by the lead generator.

Claim is handed to a claims solicitor”.

SSB Law, as mentioned, was a claims solicitor that took on a number of these cases, including those of another company operating this model, Pure Legal, having apparently been offered the opportunity to do so by the Solicitors Regulation Authority itself.

The claims solicitor then sends a letter to the installer and

“informs them to put their insurer on notice and that the claim will be in the order of 60k for damages caused by poorly installed insulation—schedule of costs does not reflect the property and damage is often not evident.

Homeowners are actively discouraged from notifying the guarantee provider”

—in this instance, CIGA—

“and instead promised a large pay out.

Just before the claim goes to court, the Claims solicitor drops the compensation amount to just over 10k (They do this to encourage the installer or insurer to pay out and also so that they can still claim costs through the fast track legal route). Costs are typically around 70k at this point”.

That is the model, and it is a scandalous model. No one should be allowed to operate that kind of arrangement in this country, in this age. Solicitors’ companies are supposed to be protecting the interests of their clients and not just trying to make a living parasiting on the distress of homeowners dealing with cavity wall insulation problems. The Solicitors Regulation Authority has a substantial job to do in not just investigating this particular company, but hopefully broadening this out to investigate how solicitors are able to get away with this kind of arrangement, in this kind of way. As we have heard this afternoon, when that arrangement does not work out very well, they go bust and leave all those householders facing those huge bills.

Are the Government able to pursue any form of intervention to assist householders protecting themselves from the claims coming back against them? In a number of instances, those claims are from the installers that have basically been attacked by these particular law firms. The installers have defended themselves, but then the law firms went bust. They have put in a lot of money, and naturally they want some of it back. It is an almighty mess as to who is really responsible for all this, although we know that overwhelmingly the responsibility lies with the dodgy law firms that have pursued this kind of practice and given false guarantees and false promises to householders. Perhaps the Ministry of Justice could look at what sort of practices make this sort of arrangement possible.

We all want to see confidence in cavity wall insulation for future programmes, although we differ among ourselves on the extent of those programmes. The hon. Member for Tiverton and Honiton suggested that it was the Liberal Democrats, in alliance with the Government, that really pursued cavity wall insulation. That was true, but it was based on the programmes of the previous Labour Government, under the cert and assess programmes that carried on until about 2012 and 2013. That produced an enormous number of generally very good cavity wall insulation programmes, but it has crashed since that date. Certainly, the Opposition hope to revive those publicly funded and sorted-out retrofit measures under a future Labour Government.

I think there is agreement on all sides that we want the general public to see that cavity wall insulation is a good thing for their homes and for them, and indeed will be a good service for the nation in making our homes warmer and more liveable. It is important that everybody has confidence that that system is going to work as well as it should and, if it does not work as well as it should, that there is proper redress. I ask the Minister to pursue seriously whatever can be done to seek additional redress for the householders who find themselves in this difficult situation. I also ask the Minister —perhaps working in conjunction with the existing guarantee agencies—to ensure that, for the future, the public have the best level of protection they can get when cavity wall insulation goes wrong: a guarantee that, under most circumstances, people undertaking cavity wall insulation can rest easy that their cavity wall insulation should work rightly for them, but that they need not worry if it does not because help will be at hand to put it right.