More than 1,700 jobs have been lost in the insulation industry since December because of the government's flagship energy efficiency policy, according to insulation companies.

The green deal, under which householders will be able to take out loans for work on their properties such as loft and cavity wall insulation to improve their energy efficiency, will be launched on 28 January. But the government's old support mechanisms that made insulation cheap or free for households were cancelled in December, so few people have been insulating their houses.

According to the Insulation Industry Forum (IIF), orders from more than 34,000 households wanting insulation were cancelled because the funding was cut, and a further 27,000 inquiries from householders put on hold. That spells higher costs and unnecessarily freezing homes at the coldest time of year.