Cavity Wall Insulation

Pauline Latham Excerpts

Tuesday 26th March 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate and to serve under your chairmanship, Mrs Latham. I thank the hon. Member for Halifax (Holly Lynch) for leading the debate. Things are different in Northern Ireland, and it is not the Minister’s responsibility to reply for Northern Ireland, but I wanted to come along to support the hon. Lady in her request for justice. Ultimately, that is what she is looking for: justice for her constituent. Hon. Members who speak after me will be seeking justice, too. The scheme was for England, Scotland and Wales—the Northern Ireland scheme is different—but I support the hon. Lady.

In my research for this speech, I read the background information, and today I have listened to the hon. Lady’s comments about the despair that some people feel. She referred to one lady who was unable to sleep for 10 nights, such was her trauma and concern. That level of concern was financial, ultimately, and she was presented with a huge bill. We have heard about figures of £17,000, £25,000 or £35,000, which indicate just how worrying the issue can be. People do not understand why they are in that position, because that was not what they signed up for.

The hon. Member for Halifax was right to set the scene. She described the financial ruin that her constituents have faced, with unexpected legal bills running to tens of thousands of pounds. Without doubt, more needs to be done to support those families and protect people from such schemes in future. It is not only about helping people with the problems that they have today, but about ensuring that such things do not happen again. [Interruption.] I think there must be something wrong with the plumbing, Mrs Latham: there is definitely a background noise. Whatever it might be, I am sure that it will not silence me or anyone else.

It is important that all constituents have good access to thermal insulation to prevent heat loss in their home. I will give some examples about our heat loss and cavity wall insulation schemes in Northern Ireland. We were able to sort the problems out, by the way, and we did not have individual companies soliciting round the doors for no-win, no-fee representation. There is no doubt that the insulation process is expensive, and many will struggle to pay for it. The Government need to be commended for what they do: it is incredible that we have schemes to enable people to upgrade their homes and ensure that they have the levels of insulation and heating that we all need.

Schemes are offered across the United Kingdom to ensure that those on a low income can avail themselves of cavity wall insulation. The schemes are different across the United Kingdom, as I have intimated. Beginning in 2013, the Government’s energy company obligation has required large energy suppliers to pay for energy-saving measures in British households that meet certain conditions, covering wall and loft insulation. We have different schemes back home: a cavity wall insulation scheme and a roof insulation scheme. The new schemes are offered through the Housing Executive and sometimes through local councils. The ECO scheme covers England, Scotland and Wales, and it is no surprise that we have differing circumstances in Northern Ireland; we often do. We have a scheme that seems to be working well, and whenever there are indiscretions or things do not fall into place, we have been quite able—so far, anyway—to come up with solutions.

Northern Ireland has a sustainable energy programme, which was set up by the utility regulator. Some 80% of the funding has been targeted at vulnerable customers and at those who are older or on a low income. It is important that we enable those people to bring their houses up to a standard such that they can avail themselves of the same energy savings and efficiencies, as well as helpful cavity wall and roof insulation. It is great that those most in need of assistance are getting it.

In my office, I deal every week with people applying for the cavity wall insulation scheme that we have in Northern Ireland, the sustainable energy programme. We have been successful in enabling people to get on it; we just wish there were a wee bit more financial aid available. Now that the Northern Ireland Assembly is back, that responsibility will fall on the shoulders of the Assembly and of the Department that looks after these matters. In my constituency of Strangford and in my main town of Newtownards, many of the homes are of a certain age and standard, so they need the cavity wall insulation schemes. The Housing Executive is the major provider of homes, although the Housing Association provides homes now, some of which are old as well.

With some cavity wall insulation schemes, we have seen examples of insulation not even being put into the walls, although people said it was. We have also seen cavity wall insulation having a detrimental effect, as the hon. Member for Halifax noted. I am not quite sure of the reasons for that, but ultimately we have been able to sort those things out because the companies involved have an obligation to deliver what is right and what is proper.

The priority is to ensure that the Government properly back those schemes to ensure that they are being done legitimately, and that constituencies like Halifax are not being lumped with thousands of pounds of fees to pay back. There certainly must be justice for those who were victims of the scheme. I am pleased that many of them have already contacted the legal ombudsman and the financial services ombudsman to question the level of service that was provided. When it gets to the stage of contacting an ombudsman, we hope for recourse, justice, restitution and ultimately compensation for the people who have been part of that process.

I thank the hon. Member for Halifax again for leading the debate. She should know that she has my full support in this matter; she has the support of all of us in this room, and that is why we are here today. I hope that the Minister and the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), will be in a position to offer some support and answer some of the questions that the hon. Lady posed. There is no doubt in my mind that the Government must now step in to right the wrongs and ensure that people are protected financially. I believe that that is their obligation. That is why we are here: I am here to support the hon. Lady and support her constituent. Other Members who will speak in this Chamber want the same justice.

[Mrs Pauline Latham (in the Chair)]

I am sorry for the buzzing noise that we can hear in the background. The Doorkeepers have contacted the engineers, and they are going to address the issue. Meanwhile, it is quite difficult to hear—I cannot hear from the Chair what is being said—so can people speak up so everybody can hear?

--- Later in debate ---

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I congratulate my hon. Friend the Member for Halifax (Holly Lynch) not only on securing this important debate but on making the detailed case that needs to be made about his scandal. The contributions of hon. Members from across the Chamber have added to her exemplary presentation, and have underlined the urgent need to do something about the issue. My hon. Friends the Members for Blackburn (Kate Hollern) and for Bradford East (Imran Hussain) and the hon. Members for Tiverton and Honiton (Richard Foord) and for Strangford (Jim Shannon) all made first-class contributions to the debate.

Cavity wall insulation has played, and will continue to play, a tremendous role in keeping people’s homes warm, reducing bills, fighting fuel poverty and uprating homes so that they are fit for a low-carbon future. Indeed, the vast majority of cavity wall insulations work perfectly well and do a good job for the homes where they are fitted. Of course, cavity wall insulations need to be done with the right materials, by the right people, in the right places and according to the right standards. I regret to say that there are circumstances—rather more in the early days than now—where those criteria were not adhered to, and problems arose with properties in which cavity wall insulation had been placed.

[Mrs Pauline Latham (in the Chair)]

Order. Could you face this way?

[Dr Whitehead]

I am sorry, Mrs Latham. One would think that, in a reasonable world, there should be speedy recognition that the problem has arisen and an equally speedy arrangement whereby the person in whose home the problem has arisen can get restitution for what has happened, in terms of both compensation and putting right what has gone wrong with the cavity wall insulation.

The Cavity Insulation Guarantee Agency came into being in 1995. As hon. Members have mentioned, it provides guarantees for cavity wall insulation. There have been 6 million since it was set up, over a 25-year period. The agency has a good record of ensuring that redress is carried out speedily and properly, where problems have arisen.

Unfortunately, not everybody knows about the agency or has had their wall insulations guaranteed through CIGA. Indeed, they might have had cavity wall insulation installed before guarantees came into place. The picture today is quite good regarding guarantees, but that does not remotely address the problem before us this afternoon. As my hon. Friend the Member for Halifax said, this is essentially a scandal on a scandal. It is the problem of cavity wall insulation going wrong in a certain area. When it does go wrong, several cases often appear in certain areas because the installer—

[Mrs Pauline Latham (in the Chair)]

Order. Could the Opposition spokesperson address the Chair?

[Dr Whitehead]

Yes, I am sorry; I keep doing that. The appearance of a number of problems in a particular area might relate to a particular company carrying out faulty insulations or using the wrong material, whereas in other areas no such events will occur.

Scandal one is that a relatively high number of deficient cavity wall insulation arrangements came to light in a particular part of the country. Scandal two is that a parasitic law firm decided to make a good living by zealously pursuing people it thought might conceivably have a claim for failed cavity wall insulation, and tried to push those people down a path to restitution in a wholly cynical and unacceptable manner. I am pleased to hear from my hon. Friend the Member for Halifax that the Solicitors Regulation Authority is investigating that company, SSB Law, but that does not address the fact that other firms also pursued that practice. Ironically, SSB Law took over a number of claims from a company that had pursued this model and gone bust in the process. One might say, therefore, that it is a scandal, upon a scandal, upon a scandal.

The way this worked is set out in a letter from CIGA to my hon. Friend the Member for Halifax, which describes how the model operated.

“Claims lead generator often unqualified promises large payouts if homeowner signs up to pursue a claim for failed cavity wall insulation.

Details passed to a RICS surveyor who does not visit the property but prepares a claim schedule based on detail provided by the lead generator.

Claim is handed to a claims solicitor”.

SSB Law, as mentioned, was a claims solicitor that took on a number of these cases, including those of another company operating this model, Pure Legal, having apparently been offered the opportunity to do so by the Solicitors Regulation Authority itself.

The claims solicitor then sends a letter to the installer and

“informs them to put their insurer on notice and that the claim will be in the order of 60k for damages caused by poorly installed insulation—schedule of costs does not reflect the property and damage is often not evident.

Homeowners are actively discouraged from notifying the guarantee provider”

—in this instance, CIGA—

“and instead promised a large pay out.

Just before the claim goes to court, the Claims solicitor drops the compensation amount to just over 10k (They do this to encourage the installer or insurer to pay out and also so that they can still claim costs through the fast track legal route). Costs are typically around 70k at this point”.

That is the model, and it is a scandalous model. No one should be allowed to operate that kind of arrangement in this country, in this age. Solicitors’ companies are supposed to be protecting the interests of their clients and not just trying to make a living parasiting on the distress of homeowners dealing with cavity wall insulation problems. The Solicitors Regulation Authority has a substantial job to do in not just investigating this particular company, but hopefully broadening this out to investigate how solicitors are able to get away with this kind of arrangement, in this kind of way. As we have heard this afternoon, when that arrangement does not work out very well, they go bust and leave all those householders facing those huge bills.

Are the Government able to pursue any form of intervention to assist householders protecting themselves from the claims coming back against them? In a number of instances, those claims are from the installers that have basically been attacked by these particular law firms. The installers have defended themselves, but then the law firms went bust. They have put in a lot of money, and naturally they want some of it back. It is an almighty mess as to who is really responsible for all this, although we know that overwhelmingly the responsibility lies with the dodgy law firms that have pursued this kind of practice and given false guarantees and false promises to householders. Perhaps the Ministry of Justice could look at what sort of practices make this sort of arrangement possible.

We all want to see confidence in cavity wall insulation for future programmes, although we differ among ourselves on the extent of those programmes. The hon. Member for Tiverton and Honiton suggested that it was the Liberal Democrats, in alliance with the Government, that really pursued cavity wall insulation. That was true, but it was based on the programmes of the previous Labour Government, under the cert and assess programmes that carried on until about 2012 and 2013. That produced an enormous number of generally very good cavity wall insulation programmes, but it has crashed since that date. Certainly, the Opposition hope to revive those publicly funded and sorted-out retrofit measures under a future Labour Government.

I think there is agreement on all sides that we want the general public to see that cavity wall insulation is a good thing for their homes and for them, and indeed will be a good service for the nation in making our homes warmer and more liveable. It is important that everybody has confidence that that system is going to work as well as it should and, if it does not work as well as it should, that there is proper redress. I ask the Minister to pursue seriously whatever can be done to seek additional redress for the householders who find themselves in this difficult situation. I also ask the Minister —perhaps working in conjunction with the existing guarantee agencies—to ensure that, for the future, the public have the best level of protection they can get when cavity wall insulation goes wrong: a guarantee that, under most circumstances, people undertaking cavity wall insulation can rest easy that their cavity wall insulation should work rightly for them, but that they need not worry if it does not because help will be at hand to put it right.