Cavity Wall Insulation

Holly Lynch Excerpts

Tuesday 26th March 2024 Westminster Hall

[Holly Lynch (Halifax) (Lab)]

I beg to move,

That this House has considered the provision of cavity wall insulation under Government grants.

I start by thanking you, Mrs Latham, for chairing this important debate. What a pleasure it is to see you.

The problem I am going to outline starts with Government grants for cavity wall insulation schemes, but I wish it ended there. Sadly, it doesn’t. I am grateful to the Minister for her time last week: I had the opportunity to brief her on the scale and nature of the problem, which I can only describe as a scandal upon a scandal. I also want to thank The Yorkshire Post, God’s own newspaper; its editor, James Mitchinson; and the deputy business editor, Greg Wright. They recognised the agony of ordinary people in what is a complicated legal mess and have worked hard to unravel it and tell those stories, and I am truly grateful to them for their diligence and painstaking work in shining a spotlight on this situation.

I am working with 20 constituents in my Halifax constituency who have all been affected. However, figures quoted by the BBC indicate that up to 1,400 people may have been impacted. More and more MPs are taking to the Chamber and writing to Government Ministers with their concerns and their local cases. Most of the cases I am working on follow a similar pattern. People had a knock on the door in around 2015 or 2016 and were asked whether they would like cavity wall insulation. They were assured that it would not cost them a penny because it was a Government-funded scheme. They were told it would be better for the environment, help them to reduce their energy bills and save them money. Most of the people who had the knock on the door were eligible for the scheme on the basis that they were in receipt of some form of welfare support, so the prospect of saving money on energy bills was an attractive one.

Yet months and years later, mould and damp started to affect properties where it had never been an issue before. In some cases, I have seen families become really quite unwell living in these conditions, and they could not understand what had changed so drastically in their homes. Years later, people had a second knock on the door from representatives of law firms, who often told them that they should not have had cavity wall insulation in the first place; that it has done damage to their homes that would cost thousands to fix; and, if they wanted the situation resolved, they should allow the law firm to take the insulators, many of which have since disappeared, to court on a no win, no fee basis. These cases were taken on by SSB Law, which corresponded with my constituents for some time until, just before Christmas of last year, these families and individuals received enforcement notices telling them they owed thousands of pounds in legal fees and that, if they did not pay them, bailiffs would be coming to their homes. One bill was for £18,000, one was for £32,000, and there were a range of amounts in between and beyond.

Bearing in mind that people were usually eligible for the Government-funded schemes on the basis that they were in receipt of some form of welfare support, these bills have devastated people who simply have no means of paying them. It is hard to overstate the impact that this has had on people’s lives. One of my constituents, Mr Zafar, is featured in the extensive coverage by The Yorkshire Post. His home was visited by a representative from a law firm in 2019. His wife was told that cavity wall insulation which had been installed a few years earlier was unlawful and potentially harmful to their children’s health. This representative persuaded Mr Zafar that they should take on the case on a no win, no fee basis. The case was subsequently transferred to SSB Law solicitors, who handled the case for nearly two years. Then, on 30 January 2023, Mr Zafar received a first enforcement letter demanding £2,973. He contacted SSB Law Solicitors and was assured via email that the payment had been made to the High Court bailiff. Despite this assurance, on 28 November 2023, he received another enforcement letter, this time for nearly £19,000. Distressed by this demand, he made inquiries and learned that SSB Law solicitors had gone into administration. He contacted Leeds High Court, requesting the suspension of the enforcement order. However, just a few days before Christmas last year, an enforcement agent visited his home while he was at work, leaving his wife terrified.

Mr Zafar said:

“I can’t work properly and me and my wife can’t sleep. The amount in the enforcement notice is always on my mind. Wherever I go, I have on my mind the fact that I must pay £19,000…My kids asked me, ‘Dad, have you done anything wrong? Why are you paying this amount? Are we going to end up homeless?’…I just want to release my family from this stressful and horrible situation.”

Another Halifax constituent, Mrs Battye, was told that cavity wall insulation would make her home more energy efficient, more environmentally friendly and would improve heating costs—as we all know, if it is done properly, that is all correct. However, in the following months, she started to notice damp and mould appearing in her front and back bedrooms—that was not a problem she had ever had before. Then in 2020, someone knocked on Mrs Battye’s door and asked whether there was any damp in the property. This man told her that the cavity wall insulation should never have been installed in the first place, and this had now caused extensive issues at her property. He stressed that it would be difficult and expensive for her to rectify, which she could not afford.

She said:

“He advised me to submit a claim for damage done to the property through a no-win, no-fee claim. I was assured I would not have to pay anything and this was the best way of rectifying the problem.”

Over the next four years, Mrs Battye received correspondence from SSB Law in relation to her case, but like the others, just before Christmas last year, she received a letter from High Court enforcement, informing her that she was liable to pay £32,000 to the defendant’s solicitor.

Mrs Battye lives alone and works for the NHS on what she describes as a modest salary. She said:

“I have no means to pay this money and I am worried about bailiffs coming to my house and getting a CCJ or a charging order on my property.”

Another constituent, who does not want to be named, said she had cavity wall insulation fitted—work in which she had confidence, on the basis that it was funded under a Government scheme. In the months that followed, she and her young son contracted pneumonia, living in a house with mould and damp—again, that was not a problem they had ever had before.

She said:

“I kept changing my wallpaper and house decorations to try to cover the mould…Because SSB Law was a big company, I believed they were definitely going to help us.”

On 5 December 2023, my constituent came home to find an enforcement letter at the back of the door. It said that she must pay more than £17,000, otherwise bailiffs would be dispatched to her home.

She said:

“It was just so shocking. My entire credit history had been damaged. My credit card has been suspended. For 10 days, I couldn’t sleep. I’d borrowed some money, I thought about selling my jewellery…It’s really hard for me. Every day, I’m thinking, ‘How am I going to be able to pay this money back?’ It’s affected my mortgage and affected my credit history. It’s affected my daily life.”

This lady was so terrified that she managed to borrow money to pay the debt she had no idea she was liable for, just to alleviate her fear of bailiffs coming to her home. However, she now worries every day how she will pay back that loan.

Mr Goodey, a constituent with a similar story, said:

“The amount of stress this has put myself and my family through is grossly unfair. I’ve since learnt that the construction and age of my property means it is unsuitable for expanding foam cavity filling and should never have been used in the first place. I’m a widowed 65-year-old who is due to retire this year with an 18-year-old son who will inherit the house eventually. I do not want him to inherit this problem.”

The Minister will see what a profound, life-changing impact this scandal has had, and is continuing to have, on people. The Solicitors Regulation Authority is investigating SSB Law, which is welcome. In a letter to me, from 23 February, it confirmed:

“We are currently investigating to see if the SSB Group acted in accordance with our Standards and Regulations. This will include whether the firm properly assessed the merits of claims, whether your constituents were properly advised at the outset on potential liabilities arising from initiating litigation, even if this was on the basis of a ‘No Win, No Fee’ agreement.”

It said:

“We will also be looking at the handling of the files and the arrangements for after the event insurance, the failure of which appears to be the main reason why your constituents are facing the prospect of demands for costs.”

Crucially—and I really welcome this—the letter from the chief exec of the SRA states:

“After the event insurance has been around for several years and is frequently used in ‘No Win, No fee’ agreements. We are not aware of similar circumstances to those your constituents now face, being experienced on this scale before. As such, we will also be speaking to a number of organisations to explore whether the numbers of cases where the failure of after the event insurance is increasing, or whether there are any wider gaps in protection to consumers that need to be addressed, given the importance of such products to individuals pursuing civil redress.”

I really welcome this investigation, which I hope will be comprehensive in assessing what has gone so horribly wrong for so many people, but the SRA advises that it is expected to report in the autumn. While we have had some success in managing to get some of the enforcement notices paused, they hang over constituents like the sword of Damocles. I therefore ask the Minister to help move this to a permanent resolution.

As I acknowledged at the beginning of my contribution, this all starts with cavity wall insulation, but I am acutely aware that the scandal has grown tentacles into a number of Government Departments and policy areas. My first ask of the Minister is that she makes representations to her colleagues to see what else can be done to hold the insurers and law firms involved to account. I am afraid to say that the responses so far from Ministers at the Ministry of Justice have been less than useless. The SRA investigation is significant, and I am hopeful that it will expose what has failed so badly. I would urge the SRA to consider making recommendations to Government and the other relevant agencies, with a view to fixing whatever its findings deem so broken that it has had an impact on 1,400 people. I would ask the Minister to liaise with the SRA to provide any support that she can, so that if there is any way to accelerate the investigation that is made a reality. Given that the SRA might not be the right body to investigate why after-the- event insurers have failed in this scenario, I hope the Minister will also consider ways in which any further regulators or agencies could be instructed to investigate and made to understand the scale, seriousness and urgency of this situation.

Returning to the Minister’s brief, I have been reassured to some extent that oversight and regulation of cavity wall insulation—which is such a good thing when done well—has improved since the energy company obligation 1 and energy company obligation 2 schemes, having discussed this in some detail with experts. However, there are still many people out there who do not know where to turn with cavity wall insulation problems dating back to that period. That problem has been exploited by some of those agencies, leading to the problems we now have.

CIGA—the Cavity Insulation Guarantee Agency—issues guarantees for cavity wall insulation and has issued almost 6.2 million since 1995. It operates a scheme that puts right failures in materials or workmanship for a period of 25 years from the date of installation, and many of my affected constituents could have explored this as a first step in seeking advice and redress. CIGA, in its correspondence with me, stresses that often homeowners were actively told not to lodge a claim with the guarantee provider, who could take action to correct the problem under guarantee, but who instead made, in these cases, false promises of a pay-out in court.

One of the questions I asked on behalf of people with cavity wall insulation who received a knock on the door from someone representing a law firm, was where did that person get their intelligence so they knew where to knock? CIGA suggests that the claims solicitor model relied on farming a large number of potential claims using data accessed either through freedom of information requests from Ofgem, or under the guise of the Data Protection Act, in an attempt to access their own guarantee records. Having gained information on properties where insulation had been installed, unqualified assessors were sent out to encourage the homeowner to pursue a claim. In most cases, they inflated any potential damage or indeed alleged damage that simply did not exist, with the subsequent report signed off by unscrupulous chartered surveyors registered with the Royal Institution of Chartered Surveyors. The Minister can see just how much all of this stinks.

I ask the Minister to undertake a review into the whole sorry mess. It is a scandal upon a scandal, which has affected these vulnerable people, up to 1,400 of them, who in some cases have chronic problems with damp and mould in their homes as a consequence of a Government-funded scheme. They were then preyed on by unscrupulous assessors and lawyers, falling through the cracks of regulation and mismanagement, and we find that the people who could least afford or least deserve it were picking up the bill, driving them into debt and despair. I look forward to the Minister’s response.

--- Later in debate ---

[Holly Lynch]

I thank you once again, Mrs Latham, for chairing this important debate so ably. I thank those hon. Members who have contributed. The hon. Member for Strangford (Jim Shannon), in his diligent and dedicated fashion, is a voice and advocate for his constituents. He is always incredibly supportive of me and so many across this House, and we all appreciate his contributions. I thank him for what he said.

I also thank my hon. Friend the Member for Blackburn (Kate Hollern), who spoke so eloquently on behalf of her constituents, including the young boy struggling with asthma and his parents, who are battling that and the debts to resolve the problems in their home, as well as taking on the giants they are up against that have boxed them in to an incredibly desperate financial position.

Like the shadow Minister, the hon. Member for Tiverton and Honiton (Richard Foord) set out the strong case for cavity wall insulation. When it is done well, it can have a positive impact on homes’ energy efficiency and can reduce energy costs. He described it as a win-win-win. We can see from hon. Members who have outlined the impact of the scenario we have been discussing on our constituents that it has ended up being a lose-lose-lose. I said it was a scandal upon a scandal; the shadow Minister said it was a scandal upon a scandal upon a scandal, and he is absolutely right. This has to be done well. We need to find a solution that gets us through this mess and gives people confidence in cavity wall insulation again.

I also thank my hon. Friend the Member for Bradford East (Imran Hussain), who characteristically explained the emotional impact on his constituents and mine, and gave a detailed assessment of how cavity wall installation not only has failed, but has shockingly led to an increase in skin conditions, including in some of the cases he has been involved in. I thank him for his contribution.

I am grateful to the Minister, who I think has understood, from the cases that have been shared, the seriousness and the urgency for the constituents we are representing today. She has encouraged Members to write to her Department. I am sure we will take her up on that offer; however, I ask her again to make representations in the strongest possible terms to her colleagues in the Ministry of Justice. As I said, I have not really been left with any confidence that it understood the seriousness of the issue. Its response to me on 22 February just gave definitions of some of the bodies involved and ended by saying:

“At this stage, given that legal services regulators are independent of government and the SRA has ongoing investigations into this issue, it would not be appropriate for MoJ to seek to intervene further.”

That really underlines the point. I absolutely am sensitive to the separation of Government and the legal system, but where there has been such a catastrophic failure, as the shadow Minister so articulately outlined—he described these law firms as operating in a parasitic way—I look to the Ministry of Justice to explore all the ways in which it could appropriately intervene.

Some legal bills that constituents are facing have been paused. I do not know how for long, and am I not absolutely clear why, but expecting people to live with this until the autumn—even if, in the best-case scenario, there is then a solution that resolves it—is asking them to live in pretty desperate, distressing conditions, which I know will drive them further into despair, debt and poverty.

I thank the Minister for her time and finish with a final plea: please can she convey in the strongest possible terms to her colleagues in the Ministry of Justice and other Departments why we really need Government help on this?

Question put and agreed to.

Resolved,

That this House has considered the provision of cavity wall insulation under Government grants.