(1 year, 9 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I beg to move,
That the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023, dated 19 February 2023, a copy of which was laid before this House on 21 February, be approved.
Mr Deputy Speaker (Sir Roger Gale)
With this we shall take the following motion:
That the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023, dated 22 February 2023, a copy of which was laid before this House on 23 February, be approved.
Amanda Solloway
The instruments were laid between 11 January and 23 February 2023, and their purpose is to ensure that benefits from the alternative fuel payment, both domestic and non-domestic, are passed through to consumers. Throughout this winter, the Government have delivered critical support to households, businesses and other non-domestic consumers in response to the unprecedented rise in energy prices. The Government brought forward emergency legislation on energy support, paving the way for this support package to be delivered rapidly across the entire United Kingdom.
The alternative fuel payments scheme provides support to households, organisations and businesses that do not use mains gas and use alternative fuels such as heating oil. Eligible domestic consumers using alternative fuels will receive a one-off fixed payment of £200. Non-domestic consumers will receive £150.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Can the Minister tell us how many households are still waiting to access the £200 payment?
Amanda Solloway
I thank the hon. Gentleman for that question. With his permission, I will get back to him with the answer.
The pass-through requirement regulations are an important part of the support package and of ensuring that support reaches those who need it. The alternative fuel payment and non-domestic alternative fuel payment pass-through schemes set out in the regulations take the same approach as other energy schemes, particularly the energy bills support scheme and the energy bill relief scheme. They make it mandatory for intermediaries to pass the financial benefit of the schemes through to end users, which is necessary because that benefit is being delivered through electricity suppliers. In some cases, a supplier will have a contract with an intermediary such as a landlord or a heat network rather than with the end user, so we need to ensure that the support that it provides to the intermediary is passed on to the end user in a fair way.
Let me clarify what I mean by “end user”. In the case of both the alternative fuel payment and the non-domestic alternative fuel payment, an end user is an individual who consumes energy and pays for its usage through an intermediary such as a landlord. We are talking about tenants of different types—they could be domestic tenants, businesses or any kind of organisation.
Like other energy schemes, the schemes set out in the regulations require that support be passed on in a “just and reasonable” way. The regulations have been drafted in that way to account for the many kinds of relationship between an intermediary and an end user. If we used a narrow definition of “just and reasonable”, we could run the risk of inadvertently excluding some intermediaries from the pass-through requirements.
The regulations also accommodate scenarios in which there are multiple end users to whom intermediaries pass on support. They make it clear when and how intermediaries should communicate with end users regarding the benefit that is being passed on.
Our approach to enforcement is consistent with the approach taken in other energy schemes, particularly the energy bills support scheme in Great Britain. If an intermediary does not pass on the benefit to a user who is entitled to it, that user will be able to pursue recovery of the benefit debt through civil proceedings. Should a court rule in the end user’s favour, the end user will be entitled to the payment plus interest at 2% above the Bank of England base rate.
The Government have published guidance on gov.uk to ensure that the requirements are clear to all parties. If necessary, there are also template letters that tenants can use to contact their landlords if they are concerned about their energy bills. The Government are working with a wide range of stakeholders to ensure that the pass-through regulations work for everybody in scope, including vulnerable people and vulnerable groups.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
It is apparent from my constituency casework that there are people who have already received the payment through their energy company, but who probably should not have. I ask the Minister to confirm on the Floor of the House what she has told me in correspondence:
“Government will not require customers to repay an Alternative Fuel Payment which they have received, even if they use electricity to heat their homes.”
Amanda Solloway
As the right hon. Gentleman will know, I am very new in post, so I will check that point before I respond, if I may.
The regulations are vital to ensuring that support reaches the people it is designed to help. They are essential to the effectiveness of the alternative fuel payment in GB and the non-domestic alternative fuel payment across the United Kingdom. They will ensure that intermediaries pass on the support to those who really need it: the households and non-domestic energy customers most vulnerable to high energy costs. With all those important reasons in mind, I commend the regulations to the House.
Dr Alan Whitehead (Southampton, Test) (Lab)
As the Minister has said, these statutory instruments deal with alternative fuel payments within the general scope of the domestic energy price guarantee scheme and the non-domestic energy bills support schemes. They deal specifically with circumstances in which the customer does not hold a fuel account directly with the supplier but, either domestically or commercially, is able to secure assistance with energy costs by ensuring that the saving is passed through from the supplier to them. This applies to, for example, park home occupiers or, in business cases, end users such as those who run cafés and guest houses and are lessees of a landlord who pays the bills, and receives the rebate, in the first instance. There will be pass-through payments of £200 for domestic end users and £150 for non-domestic end users. It should be noted that in Northern Ireland alternative fuel payments have been combined with a main payment of £600.
These latest SIs represent what I hope is the end of a long line of provisions for various sub-categories of people for whom we seem to have been legislating for a very long time. However, we ought to note, at least in passing, that this has meant that schemes that were announced in the autumn and were supposed to run for six months are now in the last month of their operation, and some people who should have received support are still waiting for it six months after the scheme started. Lest there be any doubt about that, I can tell the House that in February the Government issued a press release headed “Households, businesses and organisations off the gas grid to receive energy bill support over the coming weeks”, which stated that:
“£200 payments for off grid households start today, while businesses off the grid are expected to receive £150 payments by 10 March”,
which is in three days’ time. I therefore think that the inquiry from the hon. Member for Kilmarnock and Loudoun (Alan Brown) about who had not yet received their payments is rather germane, given what the Government themselves said about the long delays in releasing the payments.
I appreciate that the support schemes have proved difficult to administer, and that there have been repeated instances of new sub-categories of people for whom separate secondary legislation has been necessary to secure the integrity of the schemes, but does the Minister really sit comfortably with the knowledge that a not inconsiderable number of customers, both domestic and non-domestic, did not receive help that was often desperately needed for virtually the whole passage of the scheme itself, and in some instances, as I have said, may not receive support until the middle of the month?
We will not be opposing the SIs. Indeed, we want to see them dispatched so that help, albeit late, can assuredly reach people, particularly those who are relying on pass-through arrangements for relief when they do not receive the up-front sums directly. We are discussing these SIs because—as far as I can see—of defects in the original pass-through SIs, which we have already debated, as reported to the Government by the Joint Committee on Statutory Instruments.
The Committee cited one particular defect in the Energy Bills Support Scheme and Alternative Fuel Payment Pass-through Requirement (Northern Ireland) Regulations 2023, which failed to make it clear that support is to be delivered as a single rather than a monthly payment. That has been corrected in the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023. However, the Committee reported on a second defect in the legislation which I think is potentially serious: namely, the fact that there are requirements in both pass-through SIs for the intermediary in the scheme to notify the end user within 30 days of the provision of the scheme benefit of how and when the pass-through will take place and what amount will be passed through, and convey the important information that the end user can recover amounts to which they are entitled but do not receive as a civil debt.
All the information about how the end user can expect a pass-through benefit should be contained in the information from the intermediary. The Committee noted that no sanction is attached to the provision to cover cases in which the intermediary fails to inform the end user in that way. It seems that the vital part of telling someone that they will receive the benefit or can sue the intermediary if they do not receive it is essentially a voluntary act for the intermediary to perform.
Yes, they should send the information, and yes, the legislation says that they should, but if they do not, nothing will happen to them, and unless the end user is aware of their entitlements, they might remain in complete ignorance of an expected payment. Thus, nothing will happen as far as a payment is concerned. This is in spite of requirements being placed in the main legislation, the Energy Prices Act 2022. Section 10(b) of that Act states that regulations may make provision
“for the payment of a specified amount, on an application made in accordance with the regulations by a person who is an end user of an intermediary, where the intermediary fails to comply with a requirement by virtue of subsection (9) to provide information to the person”.
It is therefore clear in the main legislation what the secondary legislation is intended to achieve.
The Government’s response to the information they received from the Committee on this defect was to decide not to amend their approach and effectively to ignore this provision in the Act. They say so in the explanatory notes to this SI, and it is worth putting the Government’s line of argument for ignoring the main legislation on record. The explanatory notes state:
“Section 19(10)(b) of the Energy Prices Act 2022 provides that pass-through regulations may require an intermediary who is in breach of requirements to provide information to pay a specified amount on application by the end user to a specified person. The Department decided that the incentive for end users to make such an application for payment would have been insufficient given the time and administrative burden involved in doing so. However it is still considered that there is merit in including notification requirements in the instrument. This is on the basis that many intermediaries would be likely to comply with the requirements notwithstanding the lack of an enforcement mechanism.”
Frankly, that is a rather laughable defence for not doing in the secondary legislation what the original Act said should be done.
Is the Minister comfortable with this state of affairs where the secondary legislation has written out a provision contained in the primary legislation and potentially makes the receipt of relief from bills much more capricious in the process? Does she consider that there is arguably a case for action against the Government by those deprived of the information to which they are entitled on the grounds of negligence in doing their own pass-through, which is to pass the requirements of primary legislation into secondary legislation in such a way that it reflects the primary provisions? Clearly these are not in themselves grounds for chucking these SIs out on a vote, but perhaps the Minister should consider, since she is clearly no stranger to SIs, correcting the defects of previous SIs, and consider whether there might be a case for a further correction of these SIs to place the primary and secondary legislation on a watertight footing.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is quite incredible that we are debating these SIs in the main Chamber today. They should never have been on the Floor of the House. This is proof that, apart from othering asylum seekers, this zombie Government are just padding out what would otherwise be normal Government time. It is also ridiculous that, six months down the line from announcing the energy support scheme, so many people are unfortunately still waiting for the moneys they are due. Can the Minister confirm whether these regulations and the applications being opened up for the alternative payment will now resolve the park home issue as has been long promised? For clarity, will these regulations resolve that issue?
It would be good to know how many people are still waiting on their moneys. Also, why do so many people have to jump through hoops and apply for alternative fuel support? Why do people in areas such as the highlands and islands, where there are many more people off the gas grid than there are in Northern Ireland, have to apply when every household in Northern Ireland gets the £200 payment anyway? It is clear that people in the highlands and islands of Scotland have fallen through the cracks, and the Government should look at this again, especially if they are going to repeat the scheme in future.
The first SI is about the pass-through of payments from the likes of commercial landlords. Does the Minister know how many payments are estimated to have been made to landlords that still have not been passed on? As the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead) said, the Joint Committee on Statutory Instruments confirmed that the Government expect information to be provided to them from these commercial landlords, except that there is no enforcement mechanism. This is a defective SI, yet despite that, the Government have chosen to bring it back to the Floor of the House in the main Chamber and do nothing about support or about changing the defects reported by the Joint Committee. Have the Government considered any such mechanism to allow the enforcement of information reporting? If not, and if there is no way to enforce it, how can they assess whether this support, this taxpayers’ money, is going to those who need it, rather than being held up by intermediaries? This money should be passed on to the people to whom it is rightfully due.
The truth is that there is no incentive for commercial landlords to report, even those who are doing the right thing in passing on the money, because it is just time-wasting for them. Why should they see any merit in reporting what they have done? That means that, overall, the Government will not be able to assess the scheme’s success in getting the money to those to whom it is due.
The key question is, why is the onus being put on individuals to pursue any moneys they are owed as a civil debt? In reality, how many people know they can go to court to claim the £200 they perhaps did not receive? Again, that is beyond most people’s knowledge and ken.
Looking forward, as we come to the end of the initial energy price guarantee scheme, and given that the Government have borrowed a lot less money than they thought they would, they really must look at reducing bills. Even holding bills at £2,500, on average, is not enough because it would keep 6.5 million households in fuel poverty. We are calling for a £500 reduction. It is also critical that they review the support for small businesses, which will receive an estimated £200 on average. That is a drop in the ocean compared with their high energy bills. The Government must look at that as we come to the new financial year.
Peter Aldous (Waveney) (Con)
I was not planning to speak in this short debate, so I will be brief.
We have waited a long time for this statutory instrument. During that time, many very vulnerable people have been suffering. I acknowledge that, from the Government’s broad perspective, it is a challenge to get this legislation right, but my concern, which I hope my hon. Friend the Minister can allay, is that the punishment for landlords—I am thinking in particular of some rogue park home site owners—who do not pass on the money is, I sense, puny rather than punitive. They will just laugh at the punishment. I hope I am wrong, but I ask the Minister to take on board my concern.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I declare an interest, as my home is off grid. We are heated by an oil-based central heating system, and I have received the £200 alternative fuel payment from my energy company, Octopus Energy.
The Liberal Democrats support this scheme but, like others, we have very serious concerns about the way in which it has been constructed and implemented. I have liaised with the Minister through correspondence and at Business questions last week on the fact that a number of people whose homes are heated entirely by electricity should not, on my reading of the regulations, have been given the alternative fuel payment, but on the basis of the modelling used by the Department, they have been given it. Others in an identical situation will now have to make an application through the portal that went live yesterday. If the Government are to implement their own regulations, those applications will be refused. That will leave us in the manifestly unfair situation whereby, for two households in exactly the same situation, one will be in receipt of the £200 payment and the other will not. The Minister has already told me in correspondence that there are no plans to claw back payments that have been made. That being the case, what will be the remedy for those whose application through the portal is refused?
I look at the information that has been put into the public domain on the way in which tokens for people on prepayment meters can be paid out, and I look at the information that has been given to me by my own energy company, and they both say that the tokens can be redeemed through PayPoint. That is true, but they can also be obtained through the Post Office. Only a handful of the outer islands in my constituency have access to PayPoint, but people can go to their local post office. The information going to the end energy user should surely reflect that.
One business in Orkney brought to my attention today the fact that it will not, apparently, receive the payment because it changed its energy supplier at the start of the year. It will not get the payment from its new energy supplier or from its former one, which, again, appears to be a fundamental unfairness.
The issue relating to district heating schemes does not affect many communities, but it very much affects Lerwick, where Shetland Heat, Energy & Power provides a district heating scheme to many local households. It appears to us that they have been excluded from the scheme. Will the Minister explain to us, either now or in correspondence, why that should be the case?
The applications that are now having to be made by those who have not received their payment automatically are to be done through the portal. So will the Minister tell us how long it will take for those people to be given a decision? In the event that they are unhappy with the decision made, what will be their appeal process? It is matter of record that there is a significant overlap between homes that are off grid and those that have poor or no internet access. A number of vulnerable elderly people just do not use internet services at all, but there appears only to be an online application process. Will the Minister explain to the House why no offline process—no paper-based process—is in place for that small number of people who remain highly vulnerable?
Finally, I turn to the issue of those who rely on solid fuel—peat, coal or logs—for their heating. It is now apparent that they will have to provide receipts. Those can go back to September, but someone who has been buying coal at their shop, perhaps in a small bag, every week since goodness knows when will not have kept their receipts. How are those people, who have incurred the expense, going to get access to this important payment? It is arbitrary to say that solid fuel bought only after September will be eligible for reimbursement. I know a lot of people who will buy solid fuel in the summer months because it is at its cheapest then. What will be done to ensure that those people, who are now being told that they should have been keeping the receipts from their weekly shopping since September, are not going to be excluded?
Will the Minister tell us how many payments have already been made? How many people will now have to make an application through the portal? How many does the Department estimate will remain off grid but will not receive a payment under this scheme?
Ben Lake (Ceredigion) (PC)
It is a pleasure to follow the right hon. Member for Orkney and Shetland (Mr Carmichael), because he raised a number of important points and concerns echoed by many of my constituents. Ceredigion is a mainland constituency that has one of the highest proportions of domestic households not connected to the mains gas grid—74% of properties are off grid there. Clearly, the scheme is very welcome and will offer a great deal of support for many of my constituents. However, the right hon. Gentleman drew upon a few concerns that I share and would like to bring to the Minister’s attention this evening, as I believe they warrant urgent attention.
As the right hon. Gentleman said, those who have not received the payments automatically are required to make an online application. I have already been contacted, since yesterday, by many constituents who have explained that although they are eligible and satisfy most of the criteria, their applications have been refused and they cannot proceed any further because they have not got evidence that they bought fuel after September 2022. Many of these people will have bought oil in August or July. I know and I am anticipating arguments that fuel was slightly cheaper in those months than it would have been during the winter months, and I do not deny that, but they were not to know at the time that they would be punished for buying in advance. They were not to know that if they bought in August, as they often do, they would be at a disadvantage under this scheme.
I cannot comprehend of a fair line of argument that the Government could produce to satisfy me that some of my constituents, who have been buying in the month of August for decades in some cases, should be punished when their neighbours, who perhaps were not able to buy in August—there were many difficulties at the time— will receive a £200 payment. I would be grateful if the Minister could satisfy the House that there will be some discretion for people who bought in August. Although the prices in August were cheaper than in the winter, they were still significantly higher than prices in 2021 or 2020. The prices in August 2022 were more than double those of August 2020. It is important that individuals are not punished by an arbitrary cut-off date for the online scheme.
If we need more arguments against the arbitrary cut-off date, it is obvious that those who have received the payment automatically may not have bought fuel after September 2022, but they will benefit from the £200 because they have a direct relationship with an electricity supplier. That is an unintended unfair consequence of the scheme. I support the scheme, but that is a hitch that needs to be addressed.
My other concern is that the postcode details of a number of off-grid homes in Ceredigion were not supplied to energy suppliers—for various reasons, mainly because they are new builds or new estates—so they did not receive the payments automatically. I am grateful to the Minister and the Department for clarifying that those households are eligible for the payments but that they will need to apply through the online portal. The potential problem is that because they have a direct relationship with an electricity supplier, they will have taken it for granted that they would receive the payments automatically. I am concerned that some people may not know that they need to make an application through the online portal. Could the Government initiate any steps, such as publicity campaigns, to make sure that everyone who needs to make an application knows that before the scheme concludes?
I echo the hon. Member for Kilmarnock and Loudoun (Alan Brown) when he said that we need to look ahead to next winter. The Government would do well to do the work now to support off-grid homes in winter 2023-24.
Amanda Solloway
With the leave of the House, I will respond to the debate.
I thank my hon. Friends and other Members for their valuable contributions tonight. I will send on some information about some of the figures that I am unable to give at the moment. The regulations are necessary to ensure that we implement the alternative fuel payment scheme, in Great Britain, and the non-domestic alternative fuel payment scheme by allowing support to reach those who need it, and I think we all agree with that. The schemes are already in place and are delivering support to organisations across the United Kingdom.
As we are all aware, the domestic alternative fuel payment scheme is delivering £200 to households that use alternative fuels such as heating oil, liquified petroleum gas, coal or biomass, helping some 2 million off-grid households to meet their energy costs this winter. The scheme particularly supports households in rural areas that are not connected to the gas grid. Support was doubled to £200 in the autumn statement to reflect the price rises facing people using alternative fuels in their houses. The vast majority of eligible households should have received the payment automatically via their electricity supplier in February.
The non-domestic alternative fuel payment is delivering £150 to non-domestic customers who use alternative fuels for heating, helping premises in Great Britain and Northern Ireland meet their energy costs this winter.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
I want to pick up the point about park homes and site owners and ask the Minister to address that specific point in her closing remarks. There are concerns that site owners are not always passing on the benefit of this payment to the residents of park homes. I would like some reassurance that there are proper measures in place and penalties that will make a difference in ensuring that site owners pass the benefit of these payments on to residents.
Amanda Solloway
I will address that in a moment. As I was saying, the scheme supports a wide range of domestic and non-domestic customers, including businesses, schools, hospitals and churches that are not connected to the gas grid. It will also deliver a top-up payment to the highest users of kerosene heating oil. Most eligible non-domestic customers should receive their £150 payment automatically in March, and we continue to update and publicise our guidance on the gov.uk website to ensure that energy users and intermediaries understand their rights and obligations.
I turn now to a couple of other questions that have been raised—as I have said, if I do not address any of the questions that have been asked, I will write to hon. Members. One thing I can confirm is that the Government will not require customers to repay an alternative fuel payment that they have received, even if they use electricity to heat their house.
Thinking about how to ensure that energy users know how to make necessary claims, end users can recover claims to pass-through amounts as civil debts in the county courts, in the same way that other outstanding amounts owed to an individual can be claimed. However, for future pass-through requirements, we will be keeping ahead of that position and making sure that we review it on a constant basis. We have reflected on advice we have received regarding previous pass-through regulations and meaningfully engaged with stakeholders across the United Kingdom to promote and disseminate requirements for all the schemes. That includes working side by side with delivery partners such as utility regulators and energy suppliers, and key stakeholders including consumer ombudsman services.
We considered introducing sanctions on intermediaries if they failed to notify the end user of their rights. However, we decided that the incentive for end users to make an application for sanctions to be applied would be insufficient, given the time and the administrative burden involved in doing so. None the less, notification requirements were included in the statutory instruments, on the basis that many intermediaries are likely to comply with the requirements set out and that the published guidance clarifies the contents of this obligation. Furthermore, it was considered important to ensure consistency in approach across the pass-through regulations of all energy support schemes.
We will continue to seek views and feedback from those impacted by all these regulations, as well as from key delivery partners. I commend the regulations to the House.
Question put and agreed to.
Resolved,
That the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023, dated 19 February 2023, a copy of which was laid before this House on 21 February, be approved.
Energy
Resolved,
That the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023, dated 22 February 2023, a copy of which was laid before this House on 23 February, be approved.—(Amanda Solloway.)