The UK Government’s Green Deal energy scheme has left thousands of households in debt, writes Martyn McLaughlin.
What would you expect your government to do if you bought a house, only to discover it was saddled with a loan you had neither applied for nor knew about, which tied you to repayments for the next two decades as a result of an initiative not only encouraged by the state, but devised by it?
An apology might be a good starting point, followed by some method of swift redress. What you probably wouldn’t – and definitely shouldn’t – expect is to be fobbed off, ignored, and patronised.
Yet that is the fate has befallen one homeowner in Galashiels who purchased his modest semi-detached property in good faith. Among its selling points was the inclusion of solar panels on the roof.
Granted, sunshine may be a fleeting visitor to Gala, but he assumed, not unreasonably, that in the long run it would result in lower energy bills.
A letter which dropped on his doormat soon after disabused him of such lofty notions. The correspondence was from a company called GDFC Assets Limited, which had assumed the rights to various credit agreements from the Green Deal, a short-lived UK Government initiative to improve energy efficiency which was launched in 2013.
The letter informed him that his new home was subject to a Green Deal fixed-sum loan agreement. It helpfully explained how “it means that a previous occupier or owner elected to finance energy efficiency improvements to the property through a Green Deal loan”.
Then came the clincher. “As the new bill payer for the property,” it added, “you have become liable to make repayments under the loan, in accordance with the terms and conditions of the Green Deal Consumer Credit Agreement.” The letter went on to explain that the new homeowner would have to pay 90 pence a day, which might not seem too much of a stretch. But then he realised that he would have to pay that sum every day until January 2037.
It remains unknown just how many homeowners are in such a quagmire, but even those who knowingly signed up for such improvements are in a similar bind.
There are more than 3,000 households in Scotland saddled with long-term Green Deal debts. Many of those affected are pensioners. Some have seen their energy bills more than double in order to meet the repayments. It is, in short, a scandal of the Conservative Government’s making. What makes it unforgivable is that it is now washing its hands of the entire mess.
The idea of the Green Deal scheme was simple enough, and in theory at least, advantageous. Envisioned as a way of addressing fuel poverty, those who signed up to have the likes of solar panels fitted were promised the money they would make from energy generated by their newly eco-friendly home – known as the feed-in tariff – would offset loan repayments. That became known as the so-called Golden Rule of the scheme.
The problem came when a succession of private companies stepped in carry out the Government’s legwork, throwing in a bevvy of misinformation and hard sales tactics into the mix.
The majority dealt with a Glasgow firm called Home Energy & Lifestyle Management Limited (HELMS), run by a man called Robert Skillen, with the solar panels installed by a company called PV Solar UK Limited, also managed by Mr Skillen.
HELMS, which was approved as a supplier by the Government, was fined £200,000 by the Information Commissioner’s Office after making six million nuisance calls as part of a massive automated-call marketing campaign. However, it and PV Solar UK, which was set up with £5,000 in Scottish Enterprise funding have been liquidated.
Undeterred, and facing calls for his head, Mr Skillen is now at the helm of another firm, PV Solar Investments Limited, which directly receives money generated from the feed-in tariff from some of those who signed up from Green Deal loans. The firm’s latest accounts, filed with Companies House, show it has more than £1.2m in the bank, with a further £3.4m owed by its debtors.
Mr Skillen claims he has done nothing wrong, and blames the UK Government for the scheme’s shortcomings. Should anyone disprove his claim, he says, he will happily hand over his £10m fortune.
And what has been the UK Government’s response to this shambles? A statement from the Department of Business, Energy and Industrial Strategy insists that Green Deal loans helped householders to “make their homes more energy efficient”.
The department added that it has “always been clear that loan repayments should not exceed savings”, and that anyone who feels they have been missold loans should complain to their loan provider or, failing that, the Financial Ombudsman Service.
In other words, you’re on your tod. It is a shameful attitude, and in a country where more than a quarter of households are in fuel poverty, such negligence will not only dissuade people from making genuine green energy improvements to their home, it threatens to imperil those already struggling to make ends meet.
As it happens, hundreds of people have already complained about their deals with HELMS, but only a minority have been offered reduced terms on their loan with GDFC or, luckier still, told the agreement will be cancelled altogether.
It is high time the UK Government stepped in and resolved the matter once and for all. The shambles is of its making. It must clear it up.