Grand Committee
(2 years, 1 month ago)
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Arrangement of Business
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The Deputy Chairman of Committees (Lord Palmer of Childs Hill) (LD)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Energy Bill Relief Scheme Regulations 2022
(2 years, 1 month ago)
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Lord Callanan
That the Grand Committee do consider the Energy Bill Relief Scheme Regulations 2022.
Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, these regulations were laid before the House on 31 October. The EBRS GB and EBRS NI schemes are necessary in response to exceptional global circumstances affecting energy prices. Putin’s illegal war in Ukraine has led to an unprecedented rise in energy prices, affecting businesses and vital services right across the UK. The Government have moved swiftly to introduce emergency legislation to protect consumers from these inflated prices, which will stop businesses collapsing, protect jobs and limit inflation. I am grateful to the opposition parties for helping us speed the legislation through the House. The wider negative effects of this economic pressure, including on the businesses of gas and electricity suppliers themselves, would be severe and would materialise very quickly in the absence of an intervention of this kind.
The Energy Bill Relief Scheme Regulations 2022 and Energy Bill Relief Scheme (Northern Ireland) Regulations 2022—the EBRS regulations—have been created under the Energy Prices Act, which, as the House knows, gained Royal Assent on 25 October 2022. The Energy Prices Act, introduced in Parliament on 12 October, provided the legislative footing needed to ensure that businesses across the UK receive support with their energy bills this winter through this EBRS. The regulations are essential secondary legislation, needed to implement and operationalise the ERBSs.
The regulations reduce the charges for electricity and gas supplied by licensed energy suppliers to eligible non-domestic customers and make payments to suppliers in respect of those reductions in Great Britain and Northern Ireland. The schemes represent significant and bold action by the Government to protect all eligible non-domestic customers—including businesses, charities and the public sector—such as hospitals and schools, from excessively high energy bills over the winter period. As a result, the scheme will run for a six-month period from 1 October 2022 to 31 March 2023.
Turning to the detail of the regulations, the EBRS GB and EBRS NI regulations set out that, with few exceptions, all non-domestic customers with electricity and gas contracts from licensed non-domestic energy suppliers will be eligible for a discount. The discount will be applied to the wholesale price element of bills, and the regulations set out how this discount has been calculated. The regulations cover the process by which the energy supplier is reimbursed by the Secretary of State for the discount. Regulations give powers to the Secretary of State to delegate this function where he considers it appropriate. Further provision is included to prevent suppliers or customers deriving greater benefit than is intended, in order to protect the integrity of the schemes.
The regulations also provide for an additional reduction to be applied for qualifying financially disadvantaged customers who are supplied under so-called “deemed” or “out-of-contract” contracts. The EBRS NI regulations prevent end-users who are outside Northern Ireland receiving the discount to their bills. The regulations also cover essential operational matters, including information and reporting obligations, enforcement powers and powers to impose civil penalties in respect of missing or defective declarations.
To accompany the regulations, we have published a suite of legally binding rules and non-statutory guidance, which provides further detail on how the schemes work in practice. Given the urgency of ensuring that organisations receive the support they need this winter, we have not been able to launch a formal consultation. Instead, we have had extensive informal consultations with energy suppliers, regulatory bodies and delivery bodies. We commit to reviewing these instruments as necessary following their implementation, based on stakeholder feedback. Additionally, separate pass-through requirement regulations were laid in Parliament to ensure that intermediaries such as landlords, who have received energy price support, pass through the benefit obtained to end-users—for example, non-domestic customers in rented properties. This also includes the laying of separate regulations to ensure the pass-through of EBRS benefits to heat network customers.
The regulations’ objectives are to support economic growth and to limit inflation, and we expect their most significant impact to be the avoidance of the closure of many firms, and therefore of redundancies. The benefits of avoiding closures will accrue to business, while the benefits of avoiding redundancies will of course provide broader benefits to society. Our aim is that the support delivered through these schemes will enable public services such as schools and hospitals to continue to operate this winter.
The EBRSs remain a source of critical support for non-domestic customers across the United Kingdom. Let me emphasise that the measures in these regulations are crucial for the effective operation of the schemes. The schemes will complement the other large-scale support the Government are providing with energy and the cost of living. I hope the House will be able to support these measures and their objectives. I commend the draft regulations to the House.
Baroness McIntosh of Pickering (Con)
My Lords, I take this opportunity to congratulate the Government and my noble friend the Minister on bringing through the enabling Act and in particular the regulations before us this afternoon. I commend the support the Government are giving both to non-domestic and domestic customers. If my noble friend will permit, I have a number of questions I would like to press him on, but that does not detract from my overall support for the scheme.
The Secondary Legislation Scrutiny Committee prepared a very helpful brief, which states that the instruments are made to delegate powers to enable the Secretary of State to make technical rules for the effective operation of the EBRS, including rules for the calculation and recovery of accounts. Paragraph 7.1 of the helpful Explanatory Memorandum appended to the regulations states that the Secretary of State
“can reimburse licensed non-domestic energy suppliers applying price reductions on customers’ bills representing the wholesale energy price element of the bill. This will allow non-domestic customers to receive the benefit of such a discount.”
I welcome what my noble friend said about landlords passing this on to those who operate the businesses; that will be very welcome indeed.
Paragraph 7.2 of the Explanatory Memorandum say that the Secretary of State is required,
“within 14 days of the schemes’ introduction date, to make rules about further reductions”.
The rules will apply to the supply of gas and electricity for the period referred to by my noble friend. Will there be an opportunity for the Committee or the House to see them in advance and to scrutinise them? Will they be laid before the House? I realise they are technical rules, but it would be helpful for us to see them.
Paragraph 11.1 refers to stakeholders, individual organisations and so forth. I would like to make plea for the plight of publicans in pubs, restaurants, bars and cafés, who will benefit from this scheme until the end of March. It is particularly welcome in the run-up to Christmas, and in January and February, which tend to be slow months, as it recognises their need to incur high energy and electricity costs to make a welcoming atmosphere. My noble friend is probably not in a position to tell us today—we will have to wait until tomorrow or even the March Budget—what will happen after this scheme expires. I do not want to be like Oliver Twist and ask for more, but it would be helpful for businesses to know what the future will be. My noble friend has rightly identified that the regulations and the enabling legislation under which they fall are intended to prevent closures and job losses resulting from high wholesale energy costs, which we know are largely global in nature.
I also make a plea for non-domestic customers and businesses that operate in rural areas. The Minister and I are from the north-east of England. I grew up there and represented part of North Yorkshire for 18 years in the other place. In about a week’s time, we will have the first anniversary of Storm Arwen, when a number of businesses closed. Those who were not fortunate enough to have generators were heavily penalised. As part of learning from that, I met our local director of the NFU, which is keen to work with the Government and other bodies to see how we can enhance infrastructure and the grid in rural areas where we are heavily dependent on off-grid fuels such as oil, solid fuel and LPG, and to look at what prospect there might be for developing those off-grid resources. It is basically about lessons learned from Storm Arwen, in what was a very difficult time.
These regulations were debated in the other place by the Delegated Legislation Committee on Monday 14 November. It was asked then why there had not been a greater assessment of the impact of administration and resource costs on Ofgem, which will be heavily involved in monitoring compliance. Has BEIS looked at that? Will it have time to do so in the next few weeks? Secondly, if a company has outstanding debt on bills of greater than 28 days, it effectively does not qualify. For what reason has that benchmark been chosen? With those few questions, I wish Godspeed to the regulations and congratulate my noble friend and his department on the work they have done in this regard, for both non-domestic and domestic customers.
I have one further question, which relates more to domestic customers. What I would identify as sharp practices are being developed by electricity providers on the back of the Government’s generosity in this regard. When a customer is in credit, their direct debit payments are going up, which I can see no rhyme or reason for. If a customer is in credit, why on earth would you seek to increase their direct debit, particularly when the Government have lent the generous help that they have? Another such practice happens when, no matter how many meter readings they may give, the customer ends up with an estimated bill. Again, that seems to be a way of bumping up the price. I would welcome any response that my noble friend has to what seem to be developing sharp practices.
Lord Teverson (LD)
My Lords, we on our side very much welcome this relief for businesses and commercial operations with regard to energy prices. Again, I very much echo the noble Baroness, Lady McIntosh, on the fact that the evaluation does not take place until three months. I understand the issue of how you would evaluate it before that, but there is no obligation to put forward further plans until the end of the scheme, after six months. I would be interested to hear an answer on that.
Lord Lennie (Lab)
My Lords, first, I thank the Minister for bringing forward the instruments today and thank the stalwarts of the energy debates, the noble Baroness, Lady McIntosh, and the noble Lord, Lord Teverson, for their questions and comments, which I am sure will be responded to.
These are the first two instruments from the Energy Prices Act, which we debated recently. We supported the Bill during its passage and appreciate the pressing need to have these arrangements in law as soon as possible. As such, we will not be preventing the passage of these instruments. This also means that many of the points that we have made in regard to these instruments have already been debated in passing the Energy Prices Act. I will not spend time dealing with that and repeating points but rather will focus on the specific contents of the instruments before us today, not least as we will be considering more before too long.
As we have heard, between them these two instruments make provision for the implementation of the energy bill relief scheme—the EBRS—for non-domestic customers across the UK, with powers derived from the Energy Prices Act: Section 9 for Great Britain and Section 11 for Northern Ireland. To comment on a point that the noble Baroness, Lady McIntosh, raised, what these instruments do not do is to set out the exact terms of the scheme, neither for the first six months, which is now clear, nor for the following 18-month period that the Act allows these powers to provide for. We now know the Government’s plans for the first six months—they were recently revealed—but we have heard little on their plans for the period thereafter. Like the noble Baroness, Lady McIntosh, if the Minister is able to, I would appreciate it if he could elaborate on what is proposed, or at least update us on the progress of their consideration as to what might happen for the latter part of the period that this Act governs.
Part 3 of the instrument relates to discount recovery, on which I have a small item to raise. I understand that Energy UK previously expressed concerns to the Minister about the arrangements in this part. Its interpretation is that energy suppliers would not receive financial cover to cover the difference between normal and capped unit rates, which is inconsistent with what the Energy Prices Act suggested. That issue appears to have been fixed, which is welcome, but it is troublesome that it was not the case from the outset. I am keen to hear an explanation from the Minister of how these issues emerged and some reassurance that, in action, energy companies will have no difficulty receiving their entitlements.
I also understand that the consultation to resolve the issue took place under non-disclosure agreements, which not only is concerning in itself but, as Energy UK raised, often means that not all suppliers are included in talks and that the industry cannot work together with the Government to come to the best solutions. This seems neither a sustainable nor an effective way of creating policy.
Part 5 of the instrument, which relates to qualifying financially disadvantaged customers, requires the Secretary of State to make rules about further reductions that the suppliers must apply to the amounts payable of these customers within 14 days of the scheme’s introduction date. As the Explanatory Memorandum says,
“The current levels of many deemed and out-of-contract tariffs mean that, even with the discounts provided by the rest of the EBRS scheme, these customers … would often still experience particular difficulty in obtaining a supply of energy at a reasonable rate”.
It is welcome that additional support will be set out. However, given the situation, waiting until 14 days after the scheme’s introduction does little to offer reassurance to these customers and makes it difficult, if not impossible, for your Lordships to scrutinise the plans. Perhaps the Minister could give some advance notice of the Government’s plans for this section.
Before I finish, I briefly revisit one broader area from the Energy Prices Act, regarding the powers of the Secretary of State, some of which allow them to escape secondary legislation. Of course, that is not the case here, as we are debating secondary legislation, but I use this opportunity to repeat our regret that other significant powers given by the Act are not subject to parliamentary debates such as this.
Baroness Hoey (Non-Afl)
My Lords, could I intervene before the Minister responds? I have carefully gone through the Energy Bill Relief Scheme Regulations 2022 and the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022, which are about the same thickness, to see where the differences are. Obviously, we know that the situation is different in Northern Ireland, so there have to be some differences, but it would be helpful if, in winding, the Minister could clarify any substantial differences between how the scheme is going to work in Northern Ireland and in the rest of the United Kingdom. As the Minister is aware, we in Northern Ireland are always wary of being treated slightly differently for some unknown reason that we find out about later. I appreciate that there have to be separate regulations on this, but I would appreciate clarification on any substantial differences.
Lord Callanan (Con)
I first thank noble Lords for their contributions to this debate. As I said, the Government have implemented the EBRS GB and NI schemes to ensure that non-domestic consumers are protected from excessively high energy bills over the winter period. The schemes will make sure that the amount that eligible businesses pay for their wholesale energy costs comes down to a reasonable level, with some saving over 50% on those costs.
I am sure it is reassuring for the House to know that the schemes are already in force and delivering support to organisations across the UK. I hope this reassures the public that the Government are committed to taking decisive action to alleviate at least part of this energy crisis.
As well as providing immediate relief, these schemes will support economic growth and have the happy effect of limiting inflation caused by increasing energy bills and the knock-on effects on prices, labour, goods and services. As I said at the start, we are confident that the schemes will seek to avoid firm closures and redundancies and will ensure that vital public services and charities can continue to operate over the winter.
We will continue to monitor the schemes to ensure that this support is provided to the people and businesses that they are designed to help. We are committed to reviewing the schemes by the end of the year and will continue to work with stakeholders to ensure that their feedback is taken into account. We will use the review to look at how best to offer further support to customers who are most at risk from energy price increases beyond April 2023.
I start off with the contribution of my noble friend Lady McIntosh, who asked whether the House would have the opportunity to review the rules accompanying the statutory instrument. It is worth pointing out that the schemes have been set up at pace, and the House of course helped by passing the legislation at pace, to deal with the crisis. Therefore, it is right that the more technical details of the scheme have been included in statutory rules, which have been published on GOV.UK. The first tranche of EBRS GB and NI rules were published on 1 November; amendment rules relating to discount recovery were published on 4 November; and a third tranche of amendment rules relating to disputes and treatment of financially disadvantaged customers was published on 9 November. Minor changes made via amending rules were published on 10 November. If the noble Baroness wants to check on GOV.UK, she can while away her weekend reading the rules in detail. The business support scheme is intended to give immediate relief to businesses and other non-domestic consumers from the current level of inflated electricity and gas prices.
The noble Lord, Lord Lennie, and my noble friend Lady McIntosh asked the good question about what will happen in six months’ time, once these schemes come to an end. I cannot say that I have an answer for the Committee at the moment, because we are still to conduct the review of the scheme, which we have said that we will do by the end of the year. Perhaps if I set out what the review will consider, that will give the Committee some clues as to where we intend to go with this. The review will consider how best to offer further support to customers who are most at risk of energy price increases. By their very nature, they are likely to be those who are least able to adjust—for example, by reducing their energy uses or increasing their energy efficiency. Of course, any further support will begin at the end of the initial six-month support scheme.
My noble friend Lady McIntosh asked something that, I have to say, has nothing to do with these regulations, about lessons learned from Storm Arwen. We have had extensive discussions on that subject in this House. We published a comprehensive review of the recommendations for improvement of the electricity sector in response to Storm Arwen. There were a number of key recommendations covering enhancing system resilience; protecting customers; and additional support, such as compensation. The recommendations are due to be finalised by December 2023, but the majority are already complete, ahead of this winter.
My noble friend also asked about the assessment of the impact of administration and resource costs to Ofgem. Of course, we are working very closely with Ofgem to ensure the effective enforcement of the scheme requirements, and we will ensure that it has the necessary resources to carry out its role in this and many other government schemes operating in the energy sector. Given the pace at which we had to deliver the impact assessments of this time-bound intervention, we have focused on the largest and most significant impact—of course, the direct costs to the Exchequer.
My noble friend also asked about the 28-day disqualification policy. The arrears rule already referred to applies only to the additional discounts that suppliers are required to apply to those qualifying disadvantaged on deemed or out-of-contract contracts. That is in addition to the main EBRS discount.
On the points made about suppliers increasing energy bills, the EBRS scheme is shielding businesses across the country from soaring energy prices. The vast majority of energy suppliers are operating responsibly and within the spirit of the scheme. Of course, we are aware of reports that some companies are being faced with excessively high quotes this winter. I can tell the House that we will take a robust approach to this, and we are working with Ofgem to ensure that the licensing conditions have not been breached and that businesses are able to see the full effects of support offered by the scheme.
My noble friend Lady McIntosh also raised the issue of the UK’s energy resilience in winter. We have a secure and diverse energy system, and we are confident of our plans to protect households and businesses in the full range of scenarios this winter, in light of Russia’s illegal war.
Lord McCrea of Magherafelt and Cookstown (DUP)
I listened to what the Minister said and return to a point raised by the noble Baroness, Lady McIntosh. Do I take from the Minister’s remarks that there is going to be a review after the winter period that is covered by the present legislation? There are many small businesses scattered across the community in Northern Ireland that are totally dependent on electricity and have therefore met this volatility in energy prices. It is hard for them to plan for the future without knowledge of where we will go after the short period covered here. How long does the Minister think the review will take, because these businesses certainly need to plan for the future?
Lord Callanan (Con)
The noble Lord makes a very good point. As I said, we will conduct a review as soon as possible with the aim that it will be published before the end of the year. That will inform businesses of where we hope to go with the scheme after its expiry in April. That applies not just to businesses in Northern Ireland but to small businesses across the whole United Kingdom.
In conclusion, the Government remain committed to ensuring that consumers receive help with the rising cost of living and with energy costs. These regulations are vital to ensuring that support is delivered this coming winter. I commend this draft instrument to the Committee.
Lord Teverson (LD)
I thank the Minister for his reply to my point on fraud but, as he has not replied on holiday home lets, I assume that, if they are on business rates, they will get this benefit.
Lord Callanan (Con)
There are two aspects to this support. The price guarantee applies to domestic consumers and the EBRS applies to business consumers. If it is registered as a domestic premise, the home owner would receive this support in the same way as other owners of multiple homes would receive it—under the domestic scheme. If it is registered as a business, again they would receive a price discount. That applies to all businesses across the UK, with a few exceptions for some generators.
I take the noble Lord’s point about how this will probably go down badly in the areas concerned, but the scheme was rolled out at pace. We saw similar effects with the Bounce Back Loan Scheme during the pandemic. By the very nature of these schemes, if you do not spend years putting the scheme in place, going through every detail and exempting certain groups that might perhaps be undeserving of the support, there will be cases that most people regard as slightly unfair. That is in the nature of rolling something out quickly. We needed to get the support out quickly, which is why this has been done that way.
Energy Bill Relief Scheme (Northern Ireland) Regulations 2022
(2 years, 1 month ago)
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Lord Callanan
That the Grand Committee do consider the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022.
Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee
Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022
(2 years, 1 month ago)
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Lord Callanan
That the Grand Committee do consider the Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, these regulations were laid before the House on 31 October 2022. They are quite narrow and define the terms “Northern Ireland domestic electricity supply” and “Northern Ireland domestic gas supply” for the purposes of the energy price guarantee Northern Ireland schemes. I will refer to these schemes as the “EPG NI”.
Energy is of course an essential and unavoidable expense for households. The economic fallout of the Covid-19 pandemic and the ongoing war in Ukraine have driven a global inflationary surge that is continuing to hit UK households and businesses. A typical household in Northern Ireland has seen its energy costs increase threefold since this time last year, which will put significant financial pressure on Northern Ireland households. The Government have moved swiftly to introduce emergency legislation to protect consumers from these inflated prices and to limit inflation.
The electricity and gas markets operate differently in Northern Ireland. There is a different regulator—the Utility Regulator for Northern Ireland—no price cap and an entirely different set of suppliers. Therefore, Northern Ireland could not fall under the remit of the Great Britain energy price guarantee scheme. The Government have established the energy price guarantee Northern Ireland scheme to deliver much-needed equivalent support.
The EPG NI reduces the unit cost of electricity and gas for domestic consumers in Northern Ireland, via the same mechanism as the energy price guarantee in Great Britain. Energy suppliers reduce consumer bills by a set amount of pence per kilowatt hour, and His Majesty’s Government compensate them for that reduction. Electricity costs are being reduced by 20 pence per kilowatt hour and gas by almost 5 pence per kilo- watt hour.
Importantly, the EPG schemes in Great Britain and Northern Ireland are intended for customers on domestic tariffs. The energy bill relief scheme is for customers on non-domestic tariffs. The Energy Prices Act 2022 set out that the EPG Northern Ireland schemes are to apply to those with “domestic electricity supply” and “domestic gas supply”. These regulations define those terms for Northern Ireland.
These definitions will mean that some non-domestic premises will be in scope of the energy price guarantee electricity scheme in Northern Ireland. This includes some places of worship, which have similar metering and tariff arrangements to domestic premises. These non-domestic premises will receive EPG support. There was no timely way for energy suppliers to disaggregate them from traditional domestic premises with similar metering and tariff arrangements.
The Government want to ensure that energy users in Northern Ireland receive equivalent support to that offered to Great Britain. By a quirk of the electricity market in Northern Ireland, a bespoke definition of domestic electricity supply was required for the timely establishment of a scheme in Northern Ireland. That is what these regulations do, and I therefore commend them to the Committee.
Lord Browne of Belmont (DUP)
My Lords, I welcome this instrument. It will go some way towards alleviating hardships in many Northern Ireland households.
Energy supply in Northern Ireland is very complicated because Northern Ireland has a separate energy market from the rest of the UK, with its own rules and regulations, but, as in the rest of the UK, energy costs continue to rise at a very high rate. One problem is that two-thirds of households in Northern Ireland use heating oil but, unlike in Great Britain, the oil market in Northern Ireland is not regulated. Is there any consideration of how those who use oil will be compensated? There is great competition in the oil market in Northern Ireland, and so many suppliers, so the prices can be kept at a reasonable rate.
Turning to gas, in the past 12 months both Northern Ireland gas providers, SSE Airtricity, which supplies Greater Belfast, and Firmus Energy, which supplies townlands, have increased their prices many times. There is a problem here. The gas market is even more complicated because the Utility Regulator must approve any tariff changes proposed by Firmus Energy in its 10 townland networks, but not in Greater Belfast. SSE Airtricity must also go through the regulator.
The main electricity provider in Northern Ireland is Power NI, which is overseen by the Utility Regulator, but there are other electricity providers in Northern Ireland, which increase their prices. They are not subject to the regulator and can put up their prices at any time. Has that been considered?
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, I want to reiterate the point raised by my noble friend Lord Browne, that a vast proportion of Northern Ireland is reliant on heating oil and not on gas or electricity for heating their homes. That is the case especially in rural Northern Ireland, which is a vast area. Many of our elderly certainly rely on it, as do those who are disabled. The payment towards heating oil—I think £100 was mentioned—is totally useless and verging on an insult to those in such need, especially as they face the winter.
As the Committee knows, domestic consumers are very concerned about the £400 payment. I trust that the Minister will be able to answer this. The previous Prime Minister confirmed that the £400 energy bills discount would be paid to householders in November and backdated to October. I believe that the Chancellor has also reaffirmed that it will be received by families before Christmas. I heard one Minister say today that you cannot believe everything you read in the papers, when she was speaking about the names of possible Peers in a couple of years’ time. There is talk that the payment may not now arrive until January. Could we have some clarification on this? Certainly, two Prime Ministers and past Chancellors and Secretaries of State have confirmed that the payment would be made in November and at the latest before Christmas. Could we have confirmation of that, as it is concerning a lot of people?
Lord Teverson (LD)
My Lords, I thank the noble Lord, Lord Browne, for explaining the details of the Northern Ireland energy market. I did not realise that it was quite so complicated, as it sometimes is here with multiple suppliers, and so on.
I want to make two points. The first has already been covered by noble Lords—the predominance of oil provision in Northern Ireland and how that is dealt with. Despite the strong competition, I suspect that the £100 is far from enough in being able to compensate those rural households for their energy costs.
Secondly, as the Minister will be well aware, there is a single electricity market in Northern Ireland. The grids are integrated. As noble Lords have said, it is separate from the British system. Are there any potential issues in relation to differential charging either side of the border? There may be no issues—
Baroness Hoey (Non-Afl)
The noble Lord said that it was different from the “British system”. I think he means the Great Britain system. Northern Ireland is part of the United Kingdom; we are British.
Lord Teverson (LD)
I absolutely agree with the noble Baroness. There were no implications at all. I was trying not to say “the United Kingdom”, because the system is different from that in Great Britain. I thank her for that.
I think that I have made my point. I am interested to understand whether there is any issue between the two sides of the border in terms of what is a single market.
Lord Lennie (Lab)
My Lords, I thank the Minister for bringing the regulations before us and the noble Lords, Lord Browne, Lord McCrea and Lord Teverson, for their comments and questions. I thank the noble Lord, Lord Browne, in particular for clarifying the depth and strength of the market in Northern Ireland. I was going to say that the regulations were not contentious, but there is a bit of contention and, no doubt, the Minister will deal with that.
The instrument defines the terms “NI domestic electricity supply” and “NI domestic gas supply” to scope the extent of premises that will be eligible. Specifically, this is to include some non-domestic premises which due to their similar metering and tariff arrangements would receive EPG support. Given there is no way for energy suppliers to disaggregate, it is difficult to disagree with this. I would be keen to hear from the Minister the scope of this impact, both in terms of the number of non-domestic premises and any additional costs incurred.
The Explanatory Notes use places of worship as an example, as did the Minister, but what other types of non-domestic premises are included? Perhaps we could turn to the experts from Northern Ireland to help us with this.
I would like to raise an issue that was brought up in the other place during the debate on this instrument on Monday. There is a scheme document linked to this instrument, headed “Establishment of domestic electricity price reduction scheme for Northern Ireland”, which in Schedule 5 states that the Government will require suppliers of electricity to hand all meter data to the Government for the purposes of regulating and discussing the domestic supply scheme.
This data will encompass many things; it will be held by the Government for 10 years and can be shared with other departments, law enforcement agencies, regulatory bodies and others. While it is not pertinent to today’s instrument, this is the same for rest of the United Kingdom in the respective document. This appears to be a breach of the data access and privacy framework which was produced when smart meters were first rolled out. It states that smart meter data is the property of the customer and can be disclosed to third parties, including the Government, only with their consent. I understand the Minister in the other place committed to write to Dr Alan Whitehead MP on this issue and I would appreciate it if the Minister could ensure that I receive the same response.
Lord Callanan (Con)
I thank all noble Lords for their contributions to the debate. The Government have implemented the EPG Northern Ireland scheme to ensure that consumers are protected from excessively high energy bills over the winter period, and I am sure that is something the Committee supports. The Committee will be reassured to know the scheme is already in force and delivering support to households across Northern Ireland. I hope this will also go some way to assuring the public that the Government are committed to taking decisive action to deal with the energy crisis.
As well as providing immediate relief, this scheme, alongside the EBRS, will support economic growth and limit inflation caused by increasing energy bills and their knock-on impact on prices, labour, goods and services. The scheme has been designed to operate robustly and guard against fraud and gaming, and we will continue to monitor the schemes to ensure that support is provided and limited to those people and businesses who it is designed to help. We are committed to reviewing the schemes and we will consider how best to offer further support to the customers who are most at risk to energy price increases beyond April 2023.
In response to the questions raised, I will concentrate first on the point made by the noble Lord, Lord Browne, about heating oil. The noble Lord will be aware—and this was raised also by the noble Lord, Lord McCrea—that the alternative fuel payment will provide £100 to support households who do not use mains gas for heating. This alternative fuel payment is in addition to the £400 that households will receive through the energy bills support scheme. This applies in Northern Ireland and is designed to compensate for the rise in the price of heating oil from October 2022 in a way that is equivalent to the support received by people who heat their homes using mains gas and receive their support via the energy price guarantee. As the £100 alternative fuel payment is designed by reference to the increases in the price of heating oil and other alternative fuels that happened from September 2021 to September 2022, the Government are committed to continuing to monitor the prices over the coming months and we will consider further intervention if it is required to protect UK householders from extraordinary fuel prices.
The noble Lord, Lord Browne, further asked about unregulated electricity providers in Northern Ireland. Of course, the regulation of prices is a matter for UR, the regulator in Northern Ireland. The noble Lord is right that some electricity suppliers in Northern Ireland are not price regulated. It is a competitive market, but the EPG applies to all suppliers equally—the same discount applies to all.
The noble Lord, Lord McCrea, asked for clarification on backdated payments. The £400 EBSS will not be backdated, as it is paid as a flat sum. The EPG is, of course, backdated via an additional pence-per-kilowatt payment on top of the base EPG rate from November to March.
The noble Lord, Lord Teverson, also raised a point about the particular predominance of the oil provision in Northern Ireland; I think that I answered that in response to the noble Lord, Lord Browne. On the point regarding the single electricity market in Northern Ireland, there is no problem here. The measures that we are implementing are designed to support domestic consumers in Northern Ireland at the supply level as they relate to the retail market and do not impact on the underlying wholesale market. Therefore, they have no effect on the workings of the single electricity market.
The noble Lord, Lord Lennie, raised a point about metering and tariff arrangements and the scope of the impact on the number of non-domestic premises that have been brought into the EPG. In addition to places of worship, he questioned what other premises are included. I can confirm to him that some farms and small businesses are included. In respect of small businesses, it is those that are operating from former dwelling-houses. In reality, very few premises are affected—possibly fewer than 100 non-domestic premises are in scope—and the EPG and the EBRS of course provide equivalent support.
The noble Lord went on to ask about meter data. We are continuing to plan for and assess the use of personal data provided under the scheme documents in Northern Ireland and Great Britain. Obviously, as part of this work we will ensure that we comply with any relevant legal duties under the smart meters Data Access and Privacy Framework, so the data will be used only when necessary to calculate support payments and, of course, to ensure the good use of public money, which I am sure the noble Lord will support.
With that, I think I have answered all the relevant questions—
Lord McCrea of Magherafelt and Cookstown (DUP)
I do not think I heard a response from the Minister on whether the payment that was promised—the £400—would be coming out to the people of Northern Ireland before Christmas.
Lord Callanan (Con)
I cannot give the noble Lord a precise date for that now; we are working to implement it as quickly as possible. As soon as I can provide him with further information on that, I will do so. However, we are working as fast as possible, and we are aware of the urgency of the situation. We know that the money is required, and we will get it out as fast as we possibly can.
I commend the regulations to the Committee.