Cavity Wall Insulation

Amber Rudd Excerpts

Tuesday 3rd February 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)]

I thank the right hon. Member for Southampton, Itchen (Mr Denham) for raising the important topic of cavity wall insulation and the issue of compensation in cases where there have been problems. I will first comment on the policy generally and then move on to the conclusions from the debate and the specific requests that he made.

As I have said previously in energy debates, this Government recognise that improving domestic energy efficiency is a critical part of our strategy to deliver a secure, affordable, low-carbon energy system in this country. Consumer protection lies at the heart of the Government’s energy efficiency framework. We have built and nurtured strong relationships with a wide range of consumer protection bodies, including trading standards and Citizens Advice, and we are constantly seeking new ways to improve consumer protection.

In December, I personally sent out a joint communication with the chairman of the Association of Chief Trading Standards Officers to remind green deal market participants that it is their responsibility to uphold the green deal framework to ensure protection for all parties. When reports of potential breaches of the green deal code of practice are received, the Green Deal Oversight and Registration Body engages with the relevant authorities to investigate and address those reports, which can lead to action taken against the green deal participant, including withdrawal or suspension of green deal authorisation.

The Government set a target of 1 million homes to receive energy efficiency improvements between January 2013 and March 2015. I am pleased to say that we have already met that target and are on course to exceed it significantly; by the end of November 2014, more than 1 million homes had benefited from the installation of energy efficiency measures under the energy companies obligation and green deal framework. Cavity wall insulation has helped create millions of warm, energy-efficient homes in the UK. For many householders, cavity wall insulation is a sound financial investment, helping them save on their energy bills every year. A typical semi-detached household saves approximately £100 a year after the installation of cavity wall insulation.

[Mr Denham]

I apologise for intervening so early, but I have a question to which the Minister may well not know the answer, so this will give her time for a note to be passed forward. She mentioned the possible withdrawal of green deal certification. Does the Mark Group have green deal certification?

[Amber Rudd]

I thank the right hon. Gentleman for his consideration of timing. I will endeavour to come back to him on that point before closing.

Since 1995, uptake of cavity wall insulation has increased significantly with the launch of successive energy-efficient home improvement schemes by this Government and the last, including schemes aimed at fuel poverty such as Warm Front, and those focused on climate change, such as the energy company obligation and the green deal, which enable home owners to install energy efficiency measures, including cavity wall insulation. Between July 2010 and September 2014, 2.27 million homes had cavity wall insulation fitted; of those, 1.7 million did so under Government schemes. At the end of September 2014, 13.9 million homes had cavity wall insulation, or 72% of properties with a cavity wall. Up to the end of November 2014, some 462,103 cavity wall insulation installations were delivered under ECO, or 37.9% of total ECO measures, making them the most popular measure undertaken by households.

I will outline the protections in place for customers who receive cavity wall insulation. The installation of all cavity wall insulation must meet the requirements of the Building Regulations 2000, and the materials used to insulate cavity walls are subject to specific standards and must be certified by a technical approval body. To ensure the quality of installations under the green deal and ECO, installers must undergo a rigorous authorisation process to become authorised participants. Participants must comply with a publicly available specification setting out requirements for the installation of energy efficiency measures in existing buildings and levels of monitoring of those installations, including for cavity wall insulation. Furthermore, under the previous carbon emissions reduction target and community energy saving programme, and their successor schemes, the green deal and ECO, cavity wall insulation measures must be accompanied by a 25-year guarantee.

The green deal framework regulations require a green deal provider to agree, as part of any green deal plan, to guarantee the functioning of the improvements and to repair any damage to the property caused by the improvement. Under ECO and the CERT and CESP schemes before it, cavity wall insulation measures were required to be accompanied by an appropriate guarantee. Ofgem sets out the requirements for those guarantees in its ECO guidance: they must include a mechanism that gives assurance that funds will be available to honour the guarantee; the guarantee should last 25 years or longer; the guarantee must cover the costs of remedial and replacement works plus materials; there must be an assurance framework for the quality of installation and the product used in the installation. The suitability of the framework will be assessed and verification may be required through independent assessment by an independent United Kingdom Accreditation Service-accredited or other appropriate body. A list is available on the Ofgem website with details of guarantees that have been reviewed and are considered to meet the criteria for an appropriate guarantee under ECO.

[Hywel Williams]

I will ask the Minister a direct question put to me by one of my constituents. I said in my speech that my area is a category 4 area, and the hon. Member for Meon Valley (George Hollingbery) said that his was category 3. Should cavity wall insulation be installed in category 4 areas at all?

[Amber Rudd]

The hon. Gentleman will recall that we have debated that specific subject in this Chamber previously. My recollection is that mostly it should not have been. We went through the maps to which he referred in his comments, and the concerns that it had been inappropriately installed.

To return to the context of this debate, when the issue was put before the Government, we began conversations with the Cavity Insulation Guarantee Agency, which as we heard earlier is the largest cavity wall guarantee provider. We discussed the level and nature of existing complaints in order to understand the issue in further detail. The total number of complaints received by CIGA since 2010 is 6,890 and there have been 1.5 million cavity wall insulation installations since 2010, which implies a claim rate of 0.5% since 2010. The total number of outstanding unresolved cases on which CIGA tells me it is working is 171.

[Mr Denham]

Does that include all the cases in which CIGA has simply not replied to people who have contacted it?

[Amber Rudd]

I will have to return to that question to give the right hon. Gentleman a full answer. When I conclude my comments, I will address some of his specific requirements, including requesting a meeting between CIGA and my Department officials and me after this debate, and I will ensure that that is one of the questions that we address.

[Alistair Burt]

Before my hon. Friend leaves that point, the bright spark in all this is that we know that she will take the issue seriously, as that is her reputation, so we appreciate that she is involved. If there are so few complaints, bearing in mind how much work has been done, is there not an even greater necessity for that small number of complaints to be properly dealt with? CIGA cannot complain that it is overrun with complaints, so why should some of them have been dealt with so badly?

[Amber Rudd]

That is a very good question, which I will put to CIGA. My right hon. Friend is absolutely right. I will require more content from CIGA than the answers that it has given us so far. CIGA has already said that it will provide us with a list of responses to particular questions raised with it, some of which have been raised in this debate, and I will be happy to share those once they are received.

If a consumer has concerns that cavity wall insulation has been installed incorrectly, they should initially contact the installer who carried out the original work to see whether the issues can be rectified. If that does not resolve the issue, they should contact the guarantee provider. If they cannot locate their guarantee, they can try to contact the guarantee provider directly, which may have a record of their guarantee.

For measures installed under the CERT, CESP and ECO schemes, if there is no effective guarantee in place, the customer can contact the energy supplier that funded the measure originally. If the energy supplier cannot be found via Ofgem, consumers may wish to obtain further guidance from their local trading standards office or seek professional legal advice.

If there is a dispute about a green deal installation and an agreement cannot be reached between the consumer and the green deal provider, the consumer can contact the green deal ombudsman, who will investigate complaints and determine redress. Depending on the type of complaint, the ombudsman will, following their investigation, refer cases to the Secretary of State to determine redress or impose sanctions.

The green deal registration and oversight body has a technical monitoring strategy in place to ensure the full compliance of all green deal participants. Furthermore, Ofgem mandates technical monitoring of installation standards under ECO and the predecessor CERT and CESP schemes, and it requires ECO installers to contract for independent inspections of 5% of all measures installed, including cavity wall insulation, to ensure that they meet the required standards. The hon. Member for Arfon (Hywel Williams) said that 5% is inadequate and insufficient. I will consider his comments and speak to Ofgem about whether it is sufficient and come back to him on that issue.

[Jonathan Reynolds]

Can the Minister confirm that Ofgem, given the paperwork that it demands for each installation under ECO, keeps a database of which energy companies have funded that work, on a postcode basis?

[Amber Rudd]

I will have to come back to the hon. Gentleman on that question.

[Mr Denham]

Adding to the list of things for the Minister to come back on, there is also the issue of installations carried out under CERT and CESP. It is clear from Ofgem’s Freedom of Information Act replies that it does not have those data. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) suggested that sufficient paperwork should be held somewhere to enable the match to be made between householders and energy suppliers, even under the two earlier schemes. Can the Minister advise us where that information is held? Will she make every effort to identify that information for each of those historical cases?

[Amber Rudd]

The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) was right to raise that issue. I will review the regime for the legacy issues now and after the ECO regime expires in 2017. I agree that we need clarity about what happened in the past, and that we must make improvements for the future.

Let me move on to the suitability of cavity wall insulation for different properties. As my hon. Friend the Member for Meon Valley (George Hollingbery) said, not all properties are suitable. The hon. Member for Arfon and I have discussed that issue previously in this Chamber. A dwelling is suitable for standard cavity wall insulation if its external walls are unfilled cavity walls, the cavity is at least 50 mm wide, its masonry or brickwork is in good condition and its walls are not exposed to driving rain. It is important that cavity wall insulation is installed only in suitable homes and to the required standards. Pre-installation surveys are key in identifying suitable properties. Cavity wall insulation is not suitable in homes that are exposed to wind and driving rain, as my hon. Friend the Member for Meon Valley said.

The British Standards Institution’s regulations offer a step-by-step procedure for assessing properties’ suitability for cavity wall insulation and provide guidance for assessing exposure by looking at topography, shelter and rain spells. Technical certifications—for example, the BBA certificates—state how and where products can be used.

Members who have spoken in this debate have said that they want complaints to be properly handled, however many there are, and their constituents to get proper redress. It is clear that more needs to be done. The right hon. Member for Southampton, Itchen asked about the Mark Group. I can confirm that it is an authorised green deal provider. He requested several commitments from me, and I want to state clearly for the record that my Department and the Government take very seriously the concerns that have been raised about people’s homes. People’s homes are not just an asset or something that costs them money; they are essential to their livelihoods and well-being, which is why we take this issue so seriously.

I will speak to Ofgem, and I will write to it to ask for a summary of the number of complaints it has received and its view on that. I will consider conducting a review. I will consider the case for introducing independent oversight for all guarantees, not only those under CIGA. Concern about the guarantees, their implementation and access to them has been one of the features of this debate. I am concerned about the level of transparency—an issue that has been raised. The right hon. Member for Southampton, Itchen and others said that they were concerned about the independence of the directors of CIGA. I will have discussions with Ofgem about that issue.

The hon. Member for Arfon asked whether it would be possible to return to CWI properties after two years to ensure that the insulation was correctly installed. I will consider putting in place an independent assessment to look at properties two years after installation. I will also consider regulating the initial sales conversation—the right hon. Member for Southampton, Itchen raised that issue and quoted from various sales conversations. I have listened to the personal stories that Members have put on the record.

[Mr Denham]

The Minister has given us a list of things that she will consider. I agree with the right hon. Member for North East Bedfordshire (Alistair Burt), who said that the Minister will take those things seriously and pursue them. However, the dissolution of Parliament is approaching, and I and others will leave this place. Will she give me the satisfaction of promising to consider these issues and come up with answers before 30 March? It would be a great shame if she were to take this issue forward and, for whatever reason, not to find herself in the same position after the election. It is not unreasonable to ask her, in just under two months, to consider these issues and report back to the House.

[Amber Rudd]

I thank the right hon. Gentleman. He is absolutely right that I take this issue seriously and that I intend to get some answers on it. I commit to writing to him before Parliament dissolves to update him on where I am. I will do my level best to get as many answers as possible to address the concerns that he raised. I will start by making the points that I just outlined to Ofgem and asking for a meeting with CIGA to raise those complaints and issues.

[Alistair Burt]

On exactly the same point, I reassure anybody following the debate elsewhere that if my hon. Friend the Minister is not able to complete that work and get all the answers in that time, it will be possible to pursue these matters in the next Parliament, if the good people of North East Bedfordshire and Arfon allow it. Therefore, there should not be a break in our concerns. Our constituents can be reassured that the matter will be carried through, even if some distinguished right hon. colleagues will no longer be with us.

[Amber Rudd]

My right hon. Friend is absolutely right. Despite my commitment to come back to the right hon. Member for Southampton, Itchen with answers by the end of March, we are unlikely to have fully resolved the serious complaints and issues that have been raised here. I am sure that the future Minister, whoever they are, will continue that work, and I will ensure that it is left in good order for them. However, I hope I will be back in this role.

I thank all right hon. and hon. Members for their comments. I want to reassure their constituents that we take this issue very seriously, and I will continue to take a personal interest in it.