Energy Market: Consumer Protection

We are acting today to restore consumer confidence in the energy sector and ensure that failures in Government insulation schemes can never happen again.

The 2025 National Audit Office report into the failures of the ECO scheme gave a damning account of the failures of the ECO4 and GBIS schemes that we inherited from the previous Government: thousands of faulty installations, terrible damage to peoples’ properties, and blameless families who had signed up to a Government scheme and were forced to live in damp and sometimes unsafe conditions as a consequence.

I promised, when I first updated the House on our response, that it would never happen again.

As we embark on the Government’s warm homes plan—the biggest programme of home upgrades in British history—we must ensure that people have confidence when retrofitting and upgrading their homes.

Homeowners and landlords need to trust that upgrading their buildings will deliver the right results and not leave them facing further issues down the line. Those faulty installations did not just damage people’s properties, they eroded trust and confidence in the entire market. In October, we set out three principles for reform of consumer protection that have guided our proposals:

Work should be right first time. Despite the unacceptable failures uncovered in ECO4 and GBIS, in most cases work on Government schemes is safe and carried out to a high standard. Consumers must be able to trust that work will be done right the first time in all but the rarest circumstances.

Simplicity. People should not be expected to navigate a variety of organisations when they want to make changes to improve their homes. The installation process for low-carbon heating and energy-efficient home upgrades will be clear and straightforward.

Swift remediation and a straightforward process for redress. In those rare cases where things do go wrong, there must be clear lines of accountability, so that consumers are guaranteed to get any problems fixed quickly

We are taking this chance to completely overhaul the consumer protection landscape and fundamentally reset a system that simply has not worked for people across the country.

Today we are launching a consultation on consumer protection, seeking views on how we can simplify the current fragmented landscape and establish a single, accessible, end-to-end consumer protection service for home upgrades, that means stronger central oversight, shifting the system towards prevention, and clearer lines of accountability across Government and industry.

This will have powers to enforce better service through contracts that hold installers and delivery partners to account, including bans from working on Government schemes if they do not meet high standards.

This will protect people in the future, but we must also support people who had faulty solid wall insulation fitted during ECO4 and GBIS. We are doing that in three ways.

First, at the end of last year we launched our “Find and Fix” programme to identify and offer a full house audit to the families who had external wall insulation installed under ECO4 and GBIS.

We have now contacted over 10,000 properties and arranged over 5,000 audits.

And we want to help all affected households to access an audit as quickly as possible. TrustMark will continue to contact households, and I would encourage everyone who hears from them to take up the offer of a free audit.

I have been clear that the families who have suffered from these poor installations should not be the ones to pick up the bill. It is the industry’s responsibility to put this right and help affected families.

Secondly, in cases where the installer that fitted the faulty installation is no longer trading and the guarantee is missing, fraudulent or cancelled, the National Energy Foundation will be contacting homeowners and arranging remediation of both internal and external wall insulation fitted under ECO4 and GBIS.

Eligible homes will be identified through audits, with remediation action in recipient homes taking place as quickly as they can make that happen.

Thirdly, in the rare instances where the cost of damage from faulty ECO4 and GBIS solid wall insulations exceeds the £20,000 limit covered by a valid guarantee, we are working with delivery partners on the right solutions.

I can announce today that the Installation Assurance Authority will now cover the cost of repairs up to £25,000 where these are within the terms of the original, still-valid IAA guarantee. We will continue to work on solutions for the remaining cases, and I hope that other guarantee providers will follow the IAA’s lead.

Families who were affected should first contact the installer who carried out the installation, and where the installer is no longer trading or unable to remedy damages, they can contact their guarantee provider to initiate a claim.

ECO4 and GBIS has some of the highest levels of non-compliance that Government have seen, but other issues have been brought to the Department’s attention. In particular, many households who had spray foam installed have found they have encountered problems when selling their home. I have held extensive talks with the spray foam industry to support homeowners that have struggled to sell or been targeted by rogue removal companies. Independent advice has been published online by the Property Care Association, and we will keep working with mortgage lenders to ensure they can be flexible when lending to those affected.

A range of major lenders are already on side and have confirmed that they will not take a blanket approach to houses with spray foam, including Nationwide, Lloyds, Santander and Barclays, and I am planning a follow-up roundtable with the sector later this summer.

Finally, ensuring a fair deal for consumers in the energy market remains a priority for the Government. Today we are also responding to our consultation on strengthening protections in the energy supply market, enhancing the powers of the Energy Ombudsman and making it easier for consumers to access support when they have a complaint about their retail supplier. We want to give the ombudsman stronger powers, including the ability to issue a penalty fee that will end up as compensation for consumers, to enforce decisions and hold suppliers to account.

Families will have clearer routes to pursue justice through the courts, and we are shortening the complaints process and making automatic referral to the ombudsman easier so that people are no longer stuck in limbo waiting for their case to be escalated.

If we want to change this country, restore faith in Government’s ability to improve lives and disrupt a status quo that is simply not good enough for so many people, then we need to learn from the mistakes of the past.

We need to rebuild confidence and take people with us, and we need to ensure that failures like those we saw on the ECO4 and GBIS schemes can never happen again.

This is our chance to build an energy sector that truly works for working people, and that is the message behind the measures I have set out today.

[HCWS121]