HELMS and the Green Deal

Gavin Newlands Excerpts

Tuesday 23rd October 2018 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

I beg to move,

That this House has considered home energy and lifestyle management systems and the Green Deal.

It is a pleasure to see you in the Chair, Mr Robertson. Before I start, I should apologise to you and those present: this morning’s speech will be brought to you by Halls Soothers—although other sweets are available—so if I start coughing, please bear with me.

With winter approaching, the extra cost of heating a home will be a concern not only for income-poor families but for many of the Prime Minister’s “just about managing” families. Fuel poverty is still a reality for far too many in society. Unfortunately, many of those households live in energy-inefficient homes. That fact, combined with stagnant incomes and the impact of the Government’s austerity measures, leaves some households vulnerable to increasingly unaffordable energy bills.

To compound that, hundreds of my constituents now have unaffordable and hugely inflated bills thanks to the UK Government’s bungled green deal scheme. The green deal was a flagship scheme intended to give homeowners access to cheap loans to modify and improve home energy efficiency. The loans were to be paid back through monthly energy bills, which were to be cheaper due to the green investment made in people’s homes. That credit, however, was often sold as grant funding to confuse consumers.

The fundamental rule, or “golden rule” as it is known, was and is that the savings on bills should always be equal to or greater than the cost of the work. The idea was that consumers would be able to receive energy improvements in effect for free, reducing energy consumption and breaking free from spiralling energy bills. Not only would the house save money and have a lower carbon footprint but, it was hoped, such schemes would reduce carbon production throughout the country, helping to achieve the Government’s carbon reduction targets.

A scheme that empowers households to get out of fuel poverty and have warmer homes is always welcome, but for far too many this scheme failed, and failed utterly. The Government’s ambitious aims looked good on paper, but they fell well short and, as the result of a weak and ill-conceived framework, families were left far worse off. Rather than “pay as you save”, constituents were left paying more and saving nothing or, in far too many cases, actually footing the bill for fraud. Investment in energy savings should be a national priority, and I think that everyone across the House would agree that we need to meet fuel poverty targets and reduce carbon dioxide emissions, but elements of the scheme were so badly designed and involved such ineffective regulation that for many it became a nightmare.

I should point out, before the Minister does in her summing up, that plenty of businesses and providers did not abuse the system, with the result that many consumers benefited from the scheme, as was originally envisaged. The green deal, however, was allowed to be abused by criminals who preyed on and exploited households, many of them vulnerable. Ultimately, regardless of one’s politics or trust in any Government, no one thinks they are about to be scammed when a Government logo is on the paperwork. We will come back to the Government, who were in effect the enablers of this great fraud, but the actual fraudsters themselves were Home Energy and Lifestyle Management Systems, or HELMS.

The behaviour of Home Energy and Lifestyle Management Ltd was inexcusable. The use of classic dodgy salesman tactics—overstaying in customers’ homes to intimidate them into a sale, blatant falsifying of figures, misleading documentation, fraudulent marking of signatures, insistence on inappropriate works and outright lying to elderly vulnerable individuals—has pushed victims into deeper fuel poverty and debt, with no access to a quick and effective remedy. In the majority of cases that I have seen, individuals were sold solar panels regardless of need or suitability. Once again misled on finance, those individuals unknowingly sold their ownership of the solar panel feed-in tariff to offset the up-front cost of works. Ultimately, that meant that households had solar panels on their roof, were possibly still liable for maintenance and servicing, and yet received no financial benefit.

More unbelievably, the managing director of the now liquidated company HELMS, Robert Skillen, not only is a director of PV Solar Investments Ltd—the separate company set up to receive HELMS’s customers’ feed-in tariffs that, shamefully, is still trading and is in receipt of mis-sold victims’ feed-in tariffs—and the man with the brassiest of brass necks, but is now looking to profit from “mis-sold energy claims” through a company called True Solar Savings, despite it not being authorised by the Claims Management Regulator. He has fleeced us once, but now wants to assist us in getting redress from his own company’s mis-selling. The man has zero shame, and his outrageous lack of recognition of his culpability is astounding.

Given Robert Skillen’s central role as managing director of HELMS, therefore, I strongly advise against any business interactions with that man or his companies. Robert Skillen and HELMS, however, were enabled by the UK Government, but my constituents and many others throughout the country are now paying the price for the Government’s casual short-sightedness.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

My constituency, like others, has been affected. One-hundred and sixty-nine of my constituents have been affected, and what was striking about the public meetings that we held was the proportion of elderly people in their 70s and 80s—one with dementia, another with almost total blindness—who were tricked into this. It was not, on any level, the selling of solar panels; it was fraud.

[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.

[Dr Whitford]

Is not part of this issue that people of that age should never have been sold 25-year finance for solar panels that may last only 15 years or so? The offer to my constituents seems to have been only to reduce what they owe, not to clear it. They are still being told, “We’ll let you off £4,000, but you still owe us £6,000 for panels that aren’t working.”

--- Later in debate ---

[Gavin Newlands]

I could not agree more. The age at which some people entered 25-year agreements is shameful. That should never have been allowed. It was obviously known that that debt would ultimately just be tied to the house rather than to the individuals concerned. The reductions in payments ultimately go back to the Government’s golden rule of trying to put the consumer in no worse a position than they were previously. In my mind, that is not good enough. That is why the Government should step in rather than allowing the Green Deal Finance Company to deal with the issue itself.

An independent source calculated that the compensation process, which GDFC had no obligation to instigate, may cost the company upwards of £20 million. For its part, GDFC thinks that there remains merit in the green deal scheme. Everyone agrees with the idea, albeit with some regulatory tweaks and tightening up, but we have issues with how it was implemented and regulated.

GDFC itself has identified some of the issues that should be addressed. First, it is unclear whether a consumer with a complaint about a green deal provider should take it to the Financial Ombudsman Service, the green deal ombudsman or Ofgem. There is a risk that each regulator relies on the activities of the others, and that firms that pose a risk to consumers are not properly monitored or controlled.

Furthermore—this is crucial in the vast majority of HELMS cases—despite the regulation built into the scheme through dual regulation by the Green Deal Oversight and Registration Body and the Financial Conduct Authority, there is a complete absence of regulation of the assignment of feed-in tariff payments, which are not regulated by either of those bodies. That has caused severe consumer detriment. The feed-in tariff assignment was in many cases grossly undervalued. GDFC examined HELMS customer documentation and discovered that there was no calculation of the value paid for the feed-in tariff. HELMS simply took the difference between the green deal loan value and the cost of the solar panel installation. That meant it was incentivised to maximise green deal advice report savings by manipulating the energy performance certificate assessment, thereby maximising the value of the green deal loan and minimising the amount paid for the feed-in tariff. The effect was to maximise the net income of PVSI, HELMS’s sister company.

There is no statutory mechanism for the feed-in tariff to be reassigned in the case of mis-selling. There is no regulation of the company that receives the feed-in tariff. The contract that some customers signed and some discovered they had not signed allows the customer to buy back the rights to the feed-in tariff from PVSI, but only at the original purchase price, notwithstanding how far through the feed-in tariff income stream that takes place. GDFC believes that the feed-in tariff contracts with PVSI should be set aside. I agree, and I am sure that hon. Members do too.

As I have said, when people see any kind of Government logo on a document, the last thing they expect is to be scammed. That is why the UK Government must do more to help people in that position. My colleagues in the all-party parliamentary group in Westminster and the cross-party group in Holyrood will not allow the UK Government to wash their hands of this responsibility.

I have a number of questions for the Minister, who I know is standing in for the Minister for Energy and Clean Growth, the right hon. Member for Devizes (Claire Perry), so I hope that she will commit to respond in writing to questions that she is unable to answer today. The right hon. Member for Devizes said that she would meet me; will the Minister confirm that she is willing to meet me, the Green Deal Finance Company and trading standards in the same meeting?

Many have already paid off their loans for a number of reasons: peace of mind, concerns about carrying extra debt or because they had difficulties selling their property. They are still potential victims of fraud, but without an active loan, they cannot gain redress from the Green Deal Finance Company. What happens to them? How do they get their money back?

What was the Green Deal Finance Company advised about HELMS and mis-selling more generally when it was sold the loan book? Why was the feed-in tariff element not regulated? Would the Minister consider legislation to regulate it? Will the Government take steps to ensure that the ombudsman is appropriately resourced and has more powers to deal with rogue providers? Will the Minister meet the power companies to ensure that the metering problems are fixed as a matter of urgency and that no house will be left worse off or in debt as a result of inadequate metering? Crucially, will she commit, at the very least, to considering a compensation fund for those affected?

Thus far there has been nothing short of an abdication of duty by the Government. They have an obligation to do something to help the thousands of households that have been affected by this fraudulent behaviour. The scandalous mis-selling of panels was carried out by HELMS but enabled by the UK Government under their banner. Therefore, it is the Government’s responsibility to fix this mess and ensure that our constituents are adequately compensated in a timely fashion. A fund to provide financial relief would be a good start to repairing some of that damage. It is beyond time that the UK Government recognised their role in the fraudulent behaviour of HELMS. My constituents and, indeed, many thousands of others across Scotland and the UK, need answers and action now.

--- Later in debate ---

[Gavin Newlands]

I just want to make Members aware that Mr Skillen has returned to the country—on a number of occasions, I think. Once he turned up at the Green Deal Finance Company to ask for the details of the customers who have contacted it, so that he could contact them directly, such is the shamelessness of the man.

[Mr Sweeney]

It is appalling to realise that this chap has such a shameless attitude that he does not accept the harm he has caused to thousands of people, who cannot sleep at night. I hope that he will realise the impact he has had on them. However, it is time the Minister and the GDFC took formal steps to censure and effectively blacklist the guy, to stop him continuing to exploit vulnerable people.

As the hon. Member for Lanark and Hamilton East (Angela Crawley) mentioned, dozens of other homeowners in Glasgow North East are still literally paying the price of the green deal’s failure, through the finance deals that they were conned into to get the work done. A home is somewhere that we should all be able to consider a sanctuary and place of safety. However, many are so depressed by the green deal trap that they can no longer bear to live in their own homes, which are the very source of their turmoil.

Most people would consider a Government-backed scheme such as the green deal to carry a copper-bottomed guarantee, but for many of my constituents the feeling is one of total betrayal by the authorities they trusted. The Tory Government created the environment in which rogue traders could pull a fast one. The Government and the Green Deal Finance Company must now do everything they can to find a remedy for those who have been adversely affected. They must contact all 4,226 HELMS loan recipients, to make them aware of what they can do to find redress if they experience financial detriment because of the scheme. They must also consider a compensation scheme for those affected by mis-selling by HELMS.

That is why after I was elected I joined the all-party parliamentary group on green deal mis-selling, along with my hon. Friends the Members for Rutherglen and Hamilton West (Ged Killen) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney), and why I presented a petition to Parliament earlier this year, urging the House of Commons to ensure that the Government compensate and protect people who have suffered detriment because of the green deal scheme. In the interest of fairness and justice the Government should now take steps to ensure that the same thing can never happen in future.

--- Later in debate ---

[Gavin Newlands]

The Minister spoke about the compensation that effectively comes through the Green Deal Finance Company. Does she think it right that a private company, which had nothing to do with the initial mis-selling or scamming, is left to deal with this issue and possibly £20 million of compensation to consumers, instead of the Government, whose scheme it actually was?

[Kelly Tolhurst]

As a Government, we have worked with the Green Deal Finance Company to establish the redress system. That is why it can make offers and has done so. I will repeat the process again. If consumers are not happy with the offer that has been made, they can refer the case to the Secretary of State. We understand that only 100 offers have been accepted and 52 have been referred to the Secretary of State, so I encourage consumers to refer them to the Secretary of State. So far, only one decision has been taken on a HELMS case, but the Department is considering the evidence in other cases before the Secretary of State decides what sanction, if any, is appropriate. We expect more decisions to follow shortly.

From the outset, the green deal was subject to a monitoring regime administered by the Green Deal Oversight and Registration Body, which started investigating HELMS in October 2013 and concluded with a report in March 2015. Based on that report, the Government concluded that there had been significant consumer protection issues with the company, and the then Department of Energy and Climate Change imposed a final sanction on HELMS in November 2015. In September 2015, the Information Commissioner’s Office issued HELMS with a £200,000 nuisance calls fine—its largest ever at the time—after ruling that it

“recklessly broke marketing call regulations.”

Soon afterwards HELMS stopped issuing green deal plans, and in March 2016 it entered into liquidation.

I regret that it is taking some time to reach conclusions in many of the cases, but I would like to assure everyone that my Department is focused on progressing them as quickly and fairly as possible. We need to ensure the necessary evidence on substantive loss being incurred and to allow time for representations to be made.

Notwithstanding such mis-selling issues, let us be clear that solar PV in the UK is a success story, with rapid deployment over the last eight years. We are now exceeding our projections on solar PV deployment. In 2013 we estimated that solar capacity would reach 10 to 12 gigawatts by 2020, but the latest figures indicate that we now have over 13 gigawatts of solar capacity installed in the UK—enough to power over 3 million homes.

As I have said, I would be happy to meet with trading standards and the constituent of the hon. Member for Paisley and Renfrewshire North—I want to get a greater understanding—but will quickly answer some of the questions raised, so that the hon. Gentleman has time to wrap up.

I thank the hon. Member for Strangford (Jim Shannon) for his point about Northern Ireland. The green deal has not applied in Northern Ireland, because some of these matters are fully devolved. I thank the hon. Member for Glasgow North East (Mr Sweeney) for his comments. I would like to hear further information on the issues particularly affecting properties in his constituency, which I can pass on to the Secretary of State. I also thank the hon. Member for Central Ayrshire (Dr Whitford) for her comments. She is always a champion for her constituents, and where she feels there is an injustice, she stands up for them. The green deal framework ensures that payments should not exceed the period of the savings—over 15 to 20 years. Providers that do that will be found in breach and then action can be taken by the Secretary of State, including fines and stopping the actual deal. I would be interested to know about particular ongoing cases that may be of interest.

Unfortunately, we will probably never be able to completely eradicate mis-selling but, as a Minister in this Department, it is something I feel strongly about. Where it does happen, we will try to have the best processes in place to deal with it. I am grateful to the hon. Member for Paisley and Renfrewshire North for securing this debate and I look forward to seeing him in the future.

[Gavin Newlands]

I appreciate the Minister’s response. Will she commit to answering in writing the questions that I asked? [Interruption.] For the record, she has nodded her head.

This has been an excellent and worthwhile debate. We have heard some shocking cases from across the country. The Minister’s admission that the scheme is not perfect may be the line of the day, such is the scale of the understatement. My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) noted that only 10% of HELMS customers have complained, which highlights the fact that so far we have only dealt with the tip of the iceberg. There is much more to come.

The Chamber might not be full, but I remind the Minister that, as she said, 3,000 homes in Scotland and around 4,500 across the UK have been affected. I accept that the Government did not intend this to happen. What has happened is the unintended consequence of ineffective regulation and oversight. There is nothing we can do about the past, but the Government can still do the right thing by putting a compensation scheme in place, tightening up the regulations for any future green deal offers and taking some responsibility. I urge them to do so as soon as possible.

Question put and agreed to.

Resolved,

That this House has considered home energy and lifestyle management systems and the Green Deal.