HELMS and the Green Deal

Angela Crawley Excerpts

Tuesday 23rd October 2018 Westminster Hall

[Gavin Newlands]

I could not agree more with my hon. Friend. We are not in a competition, but although the issue affected 169 people in her constituency, in mine 293 households received HELMS panels, out of more than 3,000 in Scotland. Like her, I held my first public meeting on the issue earlier this month. As we know, attendance at such meetings can be a bit of a hit-and-miss affair, but although the subject was rather niche, targeting households with solar panels, about 120 people were in attendance. The meeting was full of individuals with similar stories of being taken advantage of by outrageous mis-selling, pressured into agreeing to inappropriately costed works or told blatant lies for a quick sale.

Two of my constituents, Mr and Mrs Murray, were particularly affected. A HELMS salesman knocked on their door in Linwood—a part of my constituency particularly affected by the mis-selling—and stated that it was to have funding available to invest in homes and energy. He had pressured the Murrays by insisting that the funding was time-limited and finite. They were told that they should have loft insulation, exterior wall insulation and solar panel works. He mentioned no tie between finance and their energy bills, and nothing about a debt tied to their property until 2039 at £1.47 a day.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

As my hon. Friend knows, last year I set up the all-party parliamentary group on green deal mis-selling, which I chair. We have been inundated by problems of that kind. The distinct issue in Scotland, with cladding work in particular, is the requirement for building warrants, which HELMS did not apply for and which cannot be applied for retrospectively. That leaves householders unable to sell or insure their homes. Does he agree that the Government should do more to support people in that position?

[Gavin Newlands]

I could not agree more with my hon. Friend, the chair of the HELMS all-party group here at Westminster. I shall come to this, but the building warrants issue is complex. In fact, I apologise in advance for making a longer speech than I am accustomed to, because of so many such complexities, building warrants being just one of them.

Back to Mr and Mrs Murray. The HELMS salesman tied them into an additional finance agreement with a personal finance company for a debt repayment of more than £9,000 to meet the expense of the solar panel installation. My constituents acknowledge that they were aware of that finance, but were told by the salesman that they would receive feed-in tariff payments quarterly to offset that cost, as well as having the benefit of lowered energy consumption and billing. However, such was the unfathomable incompetency and mis-selling of HELMS that when the Murrays applied for their feed-in tariff payments, they were missing essential documentation for the process. They pleaded with HELMS, which remained unco-operative and, as we all know, then went into liquidation, leaving my constituents helpless.

It gets worse. In January 2016, the Department of Energy and Climate Change, as was, introduced a statutory instrument requiring all existing renewable energy installations with certification issued before 15 January 2016 to submit their feed-in tariff application by 31 March 2016 or be unable to claim any feed-in tariffs or export payments. The UK Government not only failed to protect my constituents from the unscrupulous criminal behaviour of HELMS, despite accrediting it as an approved provider, but went on to implement procedures that would prevent my constituents from ever receiving payment for the solar panels that they pay £88 a month for. Mr and Mrs Murray have gone from paying £90 a month for energy to paying £220 a month, all under a Government incentive.

Many people did not know either that a 25-year debt would be tied to their house, potentially making it difficult to sell. An even bigger impediment to selling houses is that many households—possibly the vast majority—have no building warrant for the insulation that was installed on the exterior of their property. They were not informed of the need to apply for a warrant, and now not only might struggle to get one but may have to cough up the statutory uplift of 300% extra for a late application.

To compound that, in some cases when homes generate on-site renewable electricity via generating equipment such as solar panels, their import supply meter is incompatible with and affected by that on-site generation, sometimes resulting in inaccurate meter readings and billing issues. The current metering system and equipment was designed and configured to record meter electricity flows from the distribution network to consumer premises, but on-site generation has in some cases resulted in metering difficulties at premises where it is used, which are increasing in number.

Two things can happen. First, the import supply meter can run backwards. Since the ’80s, to prevent tampering, meters have been fitted with backstops so they cannot run in the wrong direction. Where on-site generators are connected at sites with meters that do not have backstops, exporting electricity causes the meter to run backwards. As a result, the consumer’s import meter readings are reduced by the amount of electricity they export. When that is discovered, the supplier may recalculate the consumer’s bill for the period for which the meter operated incorrectly and charge the consumer for the shortfall. In most cases, on-site generation exports are unmetered and the supplier needs to use estimates to calculate the bill.

In other cases, the meter treats all electricity in the same way. Some digital meters are configured in a way that results in them adding exported electricity to the imported electricity meter reading, which can result in the consumer paying for both imported and exported electricity. Again, once that situation is identified, historical bills need to be estimated.

Two other constituents of mine, Mr and Mrs Scott, had a HELMS salesman at their door five times. On the fifth occasion, Mrs Scott agreed to the works. She did so only after researching the Government’s accreditation and backing of HELMS. The family have gone from paying around £70 a month in energy bills to paying between £170 and £265 a month. The reason for that increase and variation in expenditure is that, on top of the green deal finance charges, the meter and the panels are incompatible. As a result, the family’s supply meter runs backwards and my constituents pay estimated bills from their supplier. They have fought for years to have that corrected. Only now, with prompting and reference to Ofgem guidance, has their supplier agreed to replace their supply meter with a compatible one.

That shows how ill-equipped HELMS was. Its lack of knowledge—or more likely, if we are honest, its lack of care—about panel and meter compatibility was outrageous. That should never have been an issue, and my constituents should never have seen their energy bills triple.

Members are no doubt beginning to see just how complex this issue is. My constituents and many other people across the UK have been through years of agony in seeking redress. HELMS failed to correct complaints. Constituents who took their cases to the green deal ombudsman were told they could no longer use that as a route to redress because HELMS no longer participated in the ombudsman scheme. Cases sat with the Financial Ombudsman Service for well over a year with no action. HELMS was liquidated and redress, such as it was, was unobtainable.

This was a UK Government incentive, backed and promoted as such. HELMS was accredited, and indeed promoted, under the Government banner, allowing it to enter homes and sell under a false umbrella of trust. Many of the families I have dealt with were sold on the phrase, “Government backed”. In fact, that was what persuaded many of them to listen to the dodgy sales patter in the first place. I have subsequently found that during that time, when someone searched online for a list of Government-accredited providers, HELMS was often top of the list.

How can the Government sit idle while households are left saddled with the hardships caused by HELMS? The very reason why work was agreed to was the shiny stamp of approval from the UK Government. What good is Government accreditation if it is worthless when issues and violations occur?

Who takes responsibility? HELMS and Robert Skillen have thus far escaped ultimate accountability. Despite being fined £200,000 by the Information Commissioner’s Office, they paid a mere £10,000 before the liquidation of HELMS. That highlights why the ICO has called on the Government to allow it to issue penalties of up to £500,000 to the company directors responsible.

Thus far, the Government have washed their hands of any responsibility for this mess. Instead, they hope the Green Deal Finance Company, which purchased the green deal loan book from them, will deal with it. Although GDFC was aware of some irregularities, it was not informed of the scale of the mis-selling and fraud that HELMS undertook. Given the delays with seeking redress through the ombudsman, GDFC offered to take over the case load directly to try to speed up the process. Although that has helped, the process is still too slow. GDFC has admitted that it was ill-equipped and under-staffed to deal with the scale of the issue. It has apologised for the delay and vowed to speed up the process.

Colleagues may have a different take and may have casework to prove otherwise, but I have met GDFC three times—I was particularly pleased that it attended my public meeting in Linwood—and my impression is that it is diligently, if slowly, working through the various claims and, in the majority of cases, making offers to reduce loans or cancel them altogether. Of course mistakes will be made—my office has asked GDFC to reassess particular decisions, and it will continue to ask if necessary—but thus far, in my view, GDFC has worked in good faith.

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[Jim Shannon]

The hon. Lady is absolutely right. The Government have a great responsibility to address the issue for the sake of the credibility of any future schemes and so that participants in them will not worry about the future.

It is important to recognise that price fluctuations in home heating oil played a role in the fuel poverty figures I just gave. The reduction is welcome news, but we should not rest on our laurels: 22% of people considered fuel poor is still 22% too many.

A scheme that has proved to be extremely successful is the Northern Ireland sustainable energy programme. It has a particular focus on tackling fuel poverty, with 80% of funding ring-fenced for vulnerable and low-income families. The NISEP provides help to install energy-saving measures in homes, including energy-efficient boilers, heating controls, loft insulation and cavity wall insulation. With funding coming from a levy paid by all electricity customers, the scheme is delivered by energy companies and managed by the Utility Regulator. We have a system in place that has managed the programme well and delivered.

In 2017-18, five energy companies provided schemes, each of which had different eligibility criteria and incentives and/or grants to help people to make their homes more energy efficient and perhaps reduce their overall energy bills. As I mentioned, the focus is on those at risk of fuel poverty—for example, many of the schemes work directly with housing associations, which identify eligible tenants. The sheer variety of schemes means that people can make informed decisions about which scheme would best suit them and address their specific needs.

The NISEP provides some £7.9 million towards energy efficiency interventions, which include insulation and heating upgrades. It has proved so successful that it has been extended again until March 2019. The programme is working. The hon. Member for Paisley and Renfrewshire North referred to a different scheme. I only wish that scheme were the same as then we would not have needed this debate. We have accountability whereas, as he said and as we want to illustrate, there is no accountability in that scheme.

[Angela Crawley]

The hon. Gentleman is speaking to specific issues of fuel poverty in Northern Ireland. To come back to the mis-selling of the green deal, does he agree that people were conned into buying mis-sold products on the basis that there were UK Government logos on the paperwork, and UK Government approval gave them the confidence to go ahead, so the Government should compensate those individuals? That is what we are seeking from the debate.

[Jim Shannon]

The hon. Lady is absolutely right. With great respect to the Minister and the Government, I expect the Government to respond positively to the request being made on behalf of the constituents who have been disadvantaged and mis-sold products and who, as a consequence, are poorer today than they thought they would be. I cannot understand how someone who was paying an electricity bill of £80 a month can suddenly be paying £170 or £240 a month, as the hon. Member for Paisley and Renfrewshire North described. How can that be cheaper? How can it be legal? How can that be allowed to happen? That must be taken on board.

Across the United Kingdom, we all recognise the importance of becoming greener and the need to have a diverse and sustainable energy mix, which is why it is important to look at new technologies as well as to harness those that are already tried and tested. The Northern Ireland renewables obligation, like its equivalent in Great Britain, requires suppliers to source an increasing proportion of the electricity they supply from renewable sources. Colleagues might be surprised that, despite the often wet and windy climate in Strangford—in fact, my constituency has among the lowest rainfall in Northern Ireland; we sometimes wonder if that is true, but the statistics prove it—one of the most popular sources of renewable energy that people are turning to is solar. This might be controversial given the topic of the debate, but it really does work when done well.

There is a number of large farms in Strangford, and many of them have installed solar panels—in fact, one farm in my constituency has 10 acres of solar panels. That is an example of what can happen when green energy is done right, and that is what we want. With renewables obligation certificates guaranteeing payment for every unit of electricity generated, it is not surprising that so many are investing in solar panels. Not only can people save money on electricity bills, but they help to make Northern Ireland, and the whole United Kingdom, a greener place for the next generation, reducing our reliance on fossil fuels.

What has happened with HELMS has probably put a lot of constituents off installing solar panels and, more broadly, installing renewable energy measures, but as we try to tackle climate change and battle to keep the lights on, it is important that we look closely at green energy measures, from electric cars and smart homes to making simple energy-efficiency changes to our homes. Not everyone will benefit from solar panels—people who do not generate enough electricity are unlikely to reap benefits and will end up paying more. As has been illustrated today, that was the case for many hon. Members’ constituents, and HELMS was at fault. The Minister, the Department and the Government must respond. However, it is so important that we do all we can both to help people out of fuel poverty and to support the use of renewables where possible and appropriate.

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[Mr Sweeney]

The hon. Lady makes a fair point. I urge the Minister to show some leadership and overall responsibility. In the first instance, she should contact Glasgow City Council’s chief executive and offer a dialogue. I would be receptive to the hon. Lady’s proposal of the Government offering to finance those costs as a way of breaking the impasse and getting the problem dealt with. The problem requires a whole-Government approach from city level, Scotland level and UK level. That would be the most proactive way to deal with it. Ultimately, however, responsibility lies with the Department that introduced the scheme, and it should show some moral and financial leadership.

Earlier this year I met representatives of the Green Deal Finance Company to raise my constituents’ concerns. In the last year alone the GDFC has upheld 169 complaints against HELMS, compared with 14 complaints against all other contractors upheld since 2013. Clearly, one contractor is a massive outlier in those figures. Some 154 cases against HELMS remain under consideration by the GDFC. However, the piecemeal approach to handling complaints has put the onus on the victims. The sheer number of complaints upheld against HELMS suggests that there was a systemic failure of regulation by the Government and that a proactive approach is now needed, to tackle that huge failure in the green deal scheme. It was the responsibility of the Minister and the GDFC to lead in the matter; it cannot be the responsibility of residents who are already distressed, disoriented and at their wits’ end in trying to deal with it. They cannot be put under further stress from the huge effort of having to right the wrong.

[Angela Crawley]

I am sure that the hon. Gentleman is aware, from speaking to his constituents, that people who chose to pay over several years through their electricity bills are not able to withhold payment, which is a common and acceptable consumer rights practice, if they believe that there was mis-selling. If the power company does not receive the funds, those people accrue debt. They cannot prevent the green deal payment from being made through their energy bills, which means they accrue more debt in the process.

[Mr Sweeney]

I completely agree. One of the most insidious aspects of the green deal scheme is that it locks people into a structural system. The loan is tied to the house, so the property imprisons the resident. That is the most appalling aspect of the way things have been manipulated by HELMS and other nefarious practitioners of the scheme.

HELMS made more than 6 million nuisance sales calls and, as the hon. Member for Paisley and Renfrewshire North said, was fined £200,000 by the Information Commissioner’s Office. The Department of Energy and Climate Change also fined the firm another £10,500, but conveniently the company was put into liquidation by its owners, who walked away after paying just £10,000 of the fines owed. The company was owned by the multi-millionaire Robert Skillen, who continues to live a highly privileged lifestyle at the expense of the thousands of people he ripped off—including my constituents—leaving a trail of misery and chaos in his wake. He fled abroad and continues to profit from his fraudulent business practices. If he had any honour he would return to the UK and face the accusations against him. Indeed, he should face prosecution for fraud.

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[Alan Brown]

It is a shocking indictment and really disgraceful that people are trapped and cannot get into houses that are fit for purpose.

My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) correctly highlighted the need for compensation, the issue of people who are unable to sell their homes, and the March 2016 feed-in tariff deadline that means that people are missing out on the tariffs they expected. It was good to hear a concession from the Minister about reviewing consumer regulation, and it will be interesting to see how that progresses. My hon. Friend issued a further challenge to the Government, and we all want to see action and intervention on this.

My hon. Friend the Member for Paisley and Renfrewshire North highlighted issues that are familiar to SNP Members but that the UK Government have so far chosen to ignore, despite numerous written parliamentary questions and letters from MSPs and MPs, including me. Surely today the Minister will confirm that the UK Government will take action and listen to our calls for a compensation fund for those affected.

Let me give some headline statistics: 162 households in my constituency have green deal finance with HELMS, and of those 142 have photovoltaic installations. Some 3,054 households in Scotland have HELMS green deal finance for PVs, and there are more than 4,000 across the UK. Other Members have mentioned the duration of loans: 93% of those loans in Scotland, including for 97% of my affected constituents, are in the range of 20 to 25 years. Think of that: a supposedly spend-to-save measure is being paid back over 20 or 25 years. No private company would take out such a loan to make projected minor annual savings because the risk is too great. We already know about the dodgy installations and wiring, but there is no way that those PV cells have a lifespan of 20 to 25 years. The additional ongoing maintenance required will offset any projected savings that people were led to believe they would get. Imagine having an asset that will not last for the life of the loan—it is criminal. Anyone aged 40 or over who has taken out a loan will still be paying it back when they reach state retirement age and beyond. That would be bad enough under normal loan ethics, but as we have heard, many people who took out those loans were duped by salesmen who said that savings would pay for a Government-backed scheme. What does the Minister say to the people who have been cruelly conned and left with long-term loans?

[Angela Crawley]

One couple who approached me had specifically been told that installing solar panels would help them make money on the sale of their home, but instead they have been paying double and triple the amount for their electricity. Does my hon. Friend agree that those who have been hardest hit are people in middle to low-income homes?

[Alan Brown]

I completely agree: this scheme is creating fuel-poor households, which is why Government intervention is needed.

How did this come about? For me, the situation results from a combination of a few factors. It was originally a Liberal Democrat policy that clearly had not been correctly thought through, and there was a Tory partner in the coalition Government who maintained a “hands off—market forces will prevail” ideology, which prevented direct Government intervention. There was always the desire not to get directly involved. Some unscrupulous businessmen saw a fantastic opportunity to make money at the expense of the vulnerable. The impact of events have since been compounded by successive Tory Governments who have refused to take a lead as the mis-selling scandal unravelled.

I find it incomprehensible that the UK Government have so far not seen fit to have a proper investigation into this matter and they are forcing victims to take out individual claims. That adds to the stress of the situation, and coupled with the non-disclosure agreement that is associated with any settlement offered from the Green Deal Finance Company, it is apparent that the initial approach is to minimise any refunds to those who deserve them. It is a classic “divide and conquer” approach, rather than an attempt to do the right thing.

When I read the debates on the Energy Bill in 2011, I noted that the current Minister of State for Energy and Clean Growth served on the Bill Committee. Given her familiarity with the legislation and the wider points debated in Committee and other debates, surely she would want to lead in fixing this mess. Indeed, as this mess has unfolded, it has become clear that the governance arrangements were not fit for purpose. Interestingly, the SNP spokesperson at that time, the former Member for Angus, Mike Weir, raised concerns on Second Reading, saying:

“One of the problems with energy mis-selling was that it was a long time before many of the cases came to light. Does the Minister have any thoughts on ensuring that the standards that are to be imposed on those selling green energy are regularly inspected to ensure that any problems can be detected at an early stage?”

The Minister responded:

“I can assure the hon. Gentleman that we will keep all elements of the green deal under close review…we will need continually to monitor all aspects of it, especially those relating to selling and mis-selling… If we identify any areas in which we think improvements can be made, we will not hesitate to make them.”—[Official Report, 14 September 2011; Vol. 532, c. 1049.]

Unfortunately, Mike Weir has been proved right. The UK Government did not uphold their end of the bargain regarding the governance and review that they said they would undertake.

On governance, the length of the loans alone should have prompted an automatic red flag. The 242 complaints about cold calling between October and December 2014 offering “free” solar panels should have resulted in much quicker clampdown on the actions of HELMS, but the Government were too slow to act. We know what the then Energy Minister, Greg Barker, thought of HELMS—he praised it for its entrepreneurial start-up skills. Mr Barker is okay now: he stepped down in 2015 and was promptly made a life peer in the House of Lords. The Secretary of State for Energy at that time lost his seat in 2015 but was knighted in the 2016 new year honours list and is now back as an hon. Member in this House. I am sure that my constituents will want to know why those who got it wrong have been rewarded and, as we have heard, those who have been wronged are still fighting for justice and have been ignored by the UK Government.

As we have heard, someone else who did okay out of this was the director, Robert Skillen, who was up to his neck in it. As my hon. Friend the Member for Paisley and Renfrewshire North said, Mr Skillen has some amount of brass neck to come back and campaign to protect people from the mis-selling that he was involved in. That is shocking. I hope the Minister will confirm that all necessary agencies and authorities will look into his ongoing activities and see what can be done to prevent further fraudulent action by him.

Coming back to governance, in a written answer to my parliamentary question on what review the Government had undertaken of the so-called golden rule and how it was working, the answer was “None.” Once the scheme was up and running, why did nobody look at whether the golden rule was working and whether the savings that had been predicted were being generated? That is another dereliction of duty. Who would think that basing a whole scheme on one year’s savings against a loan was a good idea? We need a proper root-and-branch review of HELMS installations, and I suggest that we need to extend it to wider green deal installations elsewhere.

The Tory Government pulled the green deal, but what analysis did they do when they put a block on it? When will we hear why they pulled it and what lessons were learned? While the Tory Government has stood back, it has been left to MSPs, MPs and citizens advice bureaux to try to assist affected constituents, but we are doing so with both hands tied behind our back because we do not have the address information. Only the Green Deal Finance Company, and therefore the Government, know exactly who has these green deal finance deals from HELMS. Again, that is why we need Government intervention. Before I conclude, I must put on record my tribute to the work done by my local CAB, particularly Linda Corbett, who has done fantastic work on digging into HELMS, understanding the issue, taking it forward and helping people, and to a local constituent, Isobel McNicol, who started a HELMS awareness and campaign group. However, it should not be left to those people to act; Government intervention is needed.

In the ministerial response to me the Government rejected the assertion that the whole issue is shrouded in secrecy, but I suggest there is still not enough transparency. We need to know how many people have been defrauded of their feed-in tariff. In response to a written parliamentary question of mine, I was told that it is not the Government who hold the information on whose feed-in tariffs have been transferred, but Ofgem. The Government need to get an understanding of the matter, because we have heard that there has been widespread fraud on the transferring of feed-in tariffs.

As others have said, this has been a flawed energy policy from the start. The problems will set back efforts to get people to sign up to future energy efficiency measures. Some people who are fuel poor and deserve to have energy efficiency measures installed in their homes will be afraid to do so. The Government must get a grip, set up a compensation fund, do a proper investigation and start taking collective action.