HELMS and the Green Deal Debate
Full Debate: Read Full DebateAlan Whitehead
Main Page: Alan Whitehead (Labour - Southampton, Test)Department Debates - View all Alan Whitehead's debates with the Department for Business, Energy and Industrial Strategy
(5 years, 10 months ago)
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This debate revolves around a number of issues—not just the question of one rogue company, but wider issues relating to the nature of the green deal programme when it was set up, what it decided to do with regard to redress arrangements, how the relationship of payment to reward was set up, and various other issues. That positions the debate firmly as being about the Government’s response to a number of these issues, not just the legal responses to a particular company that has clearly acted reprehensibly in engaging customers in deals that were anything but green and anything but advantageous to them.
I therefore congratulate the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) on securing this important debate. It is a debate that goes back to when the green deal was set up in the first place, with the Energy Act 2011. As the hon. Member for Kilmarnock and Loudoun (Alan Brown) observed, the current Energy Minister participated as a member of the Bill Committee. I think the hon. Gentleman will also be aware that I, too, was a member of that Committee, and many of the issues that have been raised this morning concerning aspects of the green deal were raised during the process of bringing the Act into being.
One particular issue that I and others raised during passage of that Act was the concept of the golden rule in the green deal. The central selling point was that people would never pay more than they would get back in savings from arrangements relating to the green deal—what they would save as a result of green deal treatments would always be greater than what they paid up front.
It was pointed out during the passage of the 2011 Act that that idea was an elastic concept, and that it was always going to be difficult to get the right balance in the relationship between payments and savings. It is that aspect of the green deal that HELMS appears to have taken particular advantage of. In fact, it is fair to say that the company systematically exploited every single weakness in the green deal in its approach to customers. It took not only all the feed-in tariff from customers, but the export tariff, which it put into a separate company. It made a lot of money out of that process, because the feed-in tariff at that point was pretty generous to customers, yet it still engaged customers in loans for those properties.
The hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Glasgow North East (Mr Sweeney) have mentioned just how many of their constituents were systematically victimised by this scam. They were victims not only of a scam, but of a scam that appeared to them to have been authorised by the Government. During the passage of the 2011 Act, considerable efforts were made to ensure that the green deal was authorisable by Government, but not enough efforts were made subsequently to ensure that what was authorisable by Government was actually sound and authorised by Government. As hon. Members have mentioned, in the early stages a number of companies such as HELMS were praised by Ministers as great examples of companies that could be properly authorised and could safely go around carrying out green deal arrangements.
As hon. Members know, the green deal was a complete fiasco and was closed down by the Government shortly after they took office following the 2015 election. Members may recall a former Energy Minister saying that he would not sleep at night unless millions of people had taken up the green deal. The number who did turned out to be only a tiny proportion of those who would have taken up the green deal. The interest rate on the loans was clearly a big factor in the low take-up. Indeed, as Members have attested to today, it is a factor in the overhanging loans that a number of people have, for up to 25 years, as a result of the mis-selling by HELMS and one or two other companies. This is not a happy tale at all. What we have heard about today are particular aspects of a wider scheme that was pretty flawed in both concept and execution.
Of course, on top of that is the fact that the Government not only withdrew from the green deal but then sold the whole loan book to a private company, the Green Deal Finance Company. It is now landed with a number of complaints, because the Government are effectively saying, “It’s nothing to do with us; it’s the Green Deal Finance Company, a private company.” It is fair to say, as hon. Members have reflected on, that the company is trying to do something about the overhanging debts that a number of people have as a result of being on the green deal loan book. Indeed, there are several reports of the Green Deal Finance Company reducing the loan debt of particular people to a level at which it does match the requirements of the golden rule, so that they are not continuing to pay more on their bills than they are saving in energy charges. But that is only scratching the surface, because only a few people have been dealt with in that positive way by the Green Deal Finance Company. There is clearly a much wider issue, which relates back to how the green deal was set up. A redress system was not built into the green deal as it unfolded, and the mess that resulted from those shortcomings is still with us today.
It is incumbent on the Government to take much greater responsibility for their own mess, for the consequences of the weaknesses in the green deal as it came forward, and certainly in the case of HELMS, a company that the Government were talking up, shall we say, until fairly shortly before it went out of business, with all the problems attached to that. I look forward to hearing from the Minister today what proposals the Government have to take this matter forward in a positive way. I note that, in answer to a written question at the beginning of the year, the Government said that they were actively involved with bodies relevant to this issue and hoped that there would be a resolution. I would be interested to know the bodies with which the Government have been involved in discussions, what they think would be an active resolution to this issue and how they are progressing with that active resolution.
My personal view is that it is imperative that some active resolution is brought about across the board, because this is a reputational issue for any future energy efficiency or home improvement scheme. If customers engaging with those schemes have no confidence in the schemes working, they will not happen. It is absolutely imperative that we get energy efficiency and green energy schemes going in this country as part of the challenge of decarbonising our energy systems and uprating the energy efficiency of homes across the country. It is important that that gets under way for the future with a clean slate and a clean bill of health for what is being done.
It is therefore incumbent on the Government, in order to foster good will towards future energy efficiency schemes and to put right the wrongs of the past, to actively engage in finding solutions to the problems of mis-selling that we have heard about this morning and to consider the wider issue of the deficiencies of the green deal scheme and the need to ensure that we get it right for any successor schemes, whether privately or publicly funded, in future.