Grand Committee
Arrangement of Business
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Police, Crime, Sentencing and Courts Act 2022 (Extraction of information from electronic devices) (Amendment of Schedule 3) Regulations 2023
(12 months ago)
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Lord Sharpe of Epsom
That the Grand Committee do consider the Police, Crime, Sentencing and Courts Act 2022 (Extraction of information from electronic devices) (Amendment of Schedule 3) Regulations 2023.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, the extraction of information powers introduced in the Police, Crime, Sentencing and Courts Act 2022 have provided a statutory basis for police and other authorised persons to obtain information from electronic devices to support investigations.
These powers came into force last November, along with a code of practice that provides guidance to authorised persons to ensure that the powers are used appropriately and effectively. They can be exercised by the authorised persons named in Schedule 3 to the Act. This is divided into three parts, which set out the different purposes for which authorised persons may exercise the powers. It is crucial that authorised persons extract information only for the purposes set by the part of the schedule in which they are placed.
At present, the Royal Navy Police, the Royal Military Police and the Royal Air Force Police can extract information only for the purposes set out under Section 37 of the Act:
“preventing, detecting, investigating or prosecuting crime … helping to locate a missing person, or … protecting a child or an at-risk adult from neglect or physical, mental or emotional harm”.
These regulations will amend Schedule 3 so that the Royal Navy Police, the Royal Military Police and the Royal Air Force Police are moved from Part 2 to Part 1 of the schedule. This change will allow these police forces also to extract information from a deceased person’s electronic device, using the power in Section 41, for the purpose of an investigation or inquest into that person’s death.
Electronic devices such as mobile phones contain a wealth of personal information and can be helpful in an investigation when someone has died in unexplained circumstances. Although data protection regulations do not apply to deceased persons, we must still ensure that information extracted from an electronic device where the user of the device has died is handled appropriately and sensitively. Additionally, an electronic device such as a mobile phone or laptop is almost certain to contain information about living people, so the authorised person will still need to be satisfied that extracting such information is necessary and proportionate.
The powers under Section 41 of the Police, Crime, Sentencing and Courts Act 2022, much like the powers under Section 37 of the Act, can be exercised only where the authorised person reasonably believes that there is information on the device that is relevant to the purposes set out under this section—in this case for an investigation or inquest into a person’s death. It is vital that these intrusive powers are available only to the authorities that need them. When the Bill was passed, it was not yet agreed that the Royal Navy Police, the Royal Military Police and the Royal Air Force Police had sufficient investigative requirement to use Section 41 powers or that their investigative needs could not be met with other existing powers.
Having taken time thoroughly to consider their case, we are now in agreement with these police forces that their investigative duties meet the requirements for use of the powers and that, without access to them, there may be a gap in their ability lawfully to extract information in these circumstances. For this reason, we are amending their position in Schedule 3 to ensure that they can investigate the death of a person as thoroughly as possible. This amendment will ensure that the Royal Navy Police, the Royal Military Police and the Royal Air Force Police have the same powers to extract information from electronic devices as civilian forces. It will also provide them with the ability to carry out their investigations as thoroughly as possible by giving them the ability to extract information from a deceased person’s device for the purpose of an investigation or inquest into that person’s death.
I very much hope that noble Lords will support this amendment to Schedule 3 of the Police, Crime, Sentencing and Courts Act 2022. I commend the regulations to the Grand Committee and I beg to move.
Lord German (LD)
My Lords, this is a straightforward piece of secondary legislation, adding the Royal Military Police, the Royal Air Force Police and the Royal Navy Police to the list of people who can exercise extraction of information powers under Section 41 of the Police, Crime, Sentencing and Courts Act 2022.
First, I declare what may be a tangential interest: I have a son-in-law who flies jets for the RAF. I would never have thought about it, but it is possible that his and my family would be affected if Section 41 powers were to be used in the event of his untimely death, if that were to happen.
I have two questions to ask the Minister. They relate to the guidance in the extraction of information code of practice, which was provided in relation to the Act and as a result of the words of the Information Commissioner, who believed that this was necessary. I am pleased that it is provided.
My first question relates to paragraph 69 of the guidance, which talks about the use of a mobile phone device “around the time of” the death of the person concerned. It uses the words “the user”. Earlier, in relation to Section 37 of the Act, the code of practice talks about where people are not necessarily the owner of the phone or mobile device. It distinguishes clearly people who own a phone from people who have a phone which is owned by somebody else—something we parliamentarians know because we have a parliamentarian phone that is not our property but is used for all sorts of communication, as well as for the business of Parliament. I do not expect the Minister to have an answer yet, but could there be some clarification of paragraph 69 that refers back to the earlier information given in the code of practice to say exactly what it means about a shared-user phone?
My second question is about paragraph 90 of the code and current practice among police forces to keep up to date with technology in order to separate personal information from necessary information related to the event being investigated—the death, criminal event or whatever. Does the Minister have any information about whether police forces of all sorts are using similar technology? The real problem, which is quite obvious, is that there is a variety of technological options available to police forces and they may all be using different ones. That means that they may not necessarily be able to do what is required in the code of practice and keep up to date with
“the technology options available in their organisations”.
There may be a question here—again, the Minister may not be able to answer it now—about whether the technology available to police forces is of sufficient robustness to allow them to be ahead of the game and whether there is one piece of software that is recommended for police forces to use.
With those two questions, I am perfectly satisfied that this is a sensible piece of legislation.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I too am happy to say that this is a straightforward statutory instrument, and we are happy to support it from the Labour Party’s point of view. The SI adds members of the Royal Navy Police, the Royal Military Police and the Royal Air Force Police to those given the power to extract information from a device after a user of that device has died, as part of an investigation or inquest into the death, to investigate crime and to safeguard others.
I think it is fair to ask the Minister why these police forces were left out of the original Bill. Was there a particular reason, or was the consultation process not complete?
The Labour Party tabled a series of amendments to the PCSC Bill creating new checks on police powers to extract data from electronic devices. This was due to concerns about vulnerable people and the intrusive nature of these searches—in particular, for rape and sexual abuse victims, who can feel that requests for information, including digital information taken from their phone, can be overly invasive and collect highly personal information that is not relevant to the inquiry. It may make people more reluctant to come forward to the police if they know that they will get this interrogation of their phones.
I understand that this SI covers something different—cases in which the owner of the device has died—and we are happy to support this amendment. However, I would still like to ask the Minister what assurance he can give about how devices and information taken from them will be handled sensitively so as not to discourage potential victims and witnesses from coming forward.
There have also been serious concerns about digital resources and the use of digital information by the police, outlined in the report last year from His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services. Can the Minister give any update on what action is being taken and whether any specific concerns have been raised about the use of digital items by the forces being given additional powers today? That is a more general question; the two questions raised by the noble Lord, Lord German, are very pertinent, so I shall be interested to hear the Minister’s response on shared-user phones and what impact the measure would have on them, as well as on the interoperability of different technologies and different police forces, as I am sure that that will be a tripping block. I am sure that it is not the intention to create any problems but it is always difficult, in my experience, to get different sources of technology to work together in a seamless way. That seems to be a challenge facing businesses, police forces and everybody battling with new digital technologies. However, overall, we support this SI.
Lord Sharpe of Epsom (Con)
My Lords, I thank both noble Lords who have spoken in this very short debate. I shall address all the questions asked of me shortly. Before I do that, I make the general point that the introduction of extraction of information powers in the 2022 Act and its code of practice are just the start of changes being made to improve the experiences of victims involved in the criminal justice system. These specific powers were introduced to ensure that victims and witnesses who report crime can be confident that their personal information will be handled appropriately and that their privacy rights will be respected.
As has been discussed, the amendment relates to the extraction of information from electronic devices when the device user is deceased, so some of the issues debated during the passage of the Police, Crime, Sentencing and Courts Bill are not available there.
The noble Lord, Lord Ponsonby, asked why it was not introduced with regard to these police forces in the original iteration. As I said in my opening remarks, at the time it was not agreed that the Royal Navy Police, the Royal Military Police and the Royal Air Force Police had a sufficient investigative requirement to use Section 41 powers or that their investigative needs could not be met with other existing powers. We have now taken the time thoroughly to consider their case and are in agreement with those police forces that their investigative duties meet the requirements for the use of the powers. In short, it is about ensuring that giving those police forces those powers is indeed the proportionate and correct thing to do, which is why it has taken a little bit of time.
On some of the more technical questions asked of me by the noble Lord, Lord German, there is a broader debate here about whether extraction of information from a personal device is always necessary, given the risks to privacy. Of course, there is a balance to be struck, which must be achieved when undertaking any investigation. All reasonable lines of inquiry must be followed to guarantee a fair trial with the right to privacy. As I said in my opening remarks, it is vital that victims and witnesses feel confident to come forward, but it is equally important that police and other agencies have access to the evidence that they need—I accept that there is no disagreement about this—including mobile data, to fully investigate crime and guarantee a fair trial.
Where information is being extracted from a deceased person’s device, the authorised person must have reasonable belief that the information on that device is relevant to an investigation or inquest into that person’s death, and be satisfied that extracting the information is necessary and proportionate. In answer to the specific question about “the device”—whether it is the owner’s own or one that just happens to be in use—I think it is any device that happens to be in the deceased’s possession. If I am wrong on that, I will of course come back and clarify. By the way, I sincerely hope that it is never a personal matter.
Lord German (LD)
Just to interrupt the Minister for a second, I was asking whether a common set of software is used across police forces.
Lord Sharpe of Epsom (Con)
I am coming to that. There is a digital evidence programme, because the Government are determined to address the challenges associated with selectively extracting, analysing and reporting digital evidence gathered in criminal investigations, as we have been discussing.
We are supporting the Police Digital Service with £1.36 million in 2023-24 to undertake work to better understand the challenges in this area and to work with the private sector to develop and test new technologies. The evidence programme has been set up with a wide range of deliverables, including landscape reviews of force capabilities and gaps; creation of a new RASSO tech partnership board, bringing actors across policing together with the private sector—please do not ask me what the acronym RASSO stands for; development and testing of a range of private sector tech products within police forces; and, through the ACE impact lab process, working with technology companies to develop innovative solutions to key RASSO problems. The work is focused on solving the problems that victims experience and the selective extraction, analysis and reporting of digital evidence. It is fairly safe to say that all the questions asked of me by the noble Lord will be covered under that piece of work.
Lord Ponsonby of Shulbrede (Lab)
I am sorry to interrupt the Minister again, but the acronym RASSO stands for rape and serious sexual offences.
Lord Sharpe of Epsom (Con)
I thank the noble Lord very much for that.
On the progress being made on recommendation 5 of the HMICFRS report, which relates to budgets and the funding of digital forensics, we have also set up a commissioning board, jointly led by policing and the Home Office, to enable joint decision-making around prioritisation and to increase the transparency of funding decisions, including those in digital forensics, in line with that recommendation. In addition, we are investing £11 million into providing forces with technology that will enhance their capability to carry out rape investigations quickly and to provide a better service to victims.
I thank noble Lords very much for their questions. I hope I have answered them; I think I have. In closing, I repeat my thanks for the time taken to discuss and consider these issues. I once again commend the regulations to the Committee.
Environmental Permitting (England and Wales) (Amendment) (England) Regulations 2023
(12 months ago)
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Lord Benyon
That the Grand Committee do consider the Environmental Permitting (England and Wales) (Amendment) (England) Regulations 2023.
Relevant document: 36th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, the purpose of this instrument is to make nine minor amendments to the environmental permitting regulations 2016 as applied to groundwater activities. Groundwater is a critical national resource; it provides a clean and reliable source of drinking water, plays a vital role across many industry sectors, and supports ecosystems. The Government are committed to ensuring that the quality of our groundwater resources is protected.
In the face of growing pressures from climate change and population growth, it is important to optimise the regulatory tools available for managing and protecting groundwater quality. The environmental permitting regulations 2016 are an effective tool for managing groundwater activities. However, several limitations with the way the regulations implement groundwater protections have been identified, which has led to inconsistencies in approach within the wider environmental permitting regulations regime. These limitations can be resolved by the nine amendments, which will support many industries by reducing regulatory burden and costs, facilitating green energy production from geothermal and ground source heat, promoting growth and accelerating permit delivery. These amendments also create the right regulatory conditions to promote and allow innovation within the circular economy, allowing the appropriate and safe reuse of materials where it is environmentally acceptable. I now turn to the detail of these amendments.
Currently, groundwater activities can be permitted only through the use of bespoke environmental permits, which are the highest level of permits. This results in higher than necessary costs and an unnecessary level of regulatory burden to businesses. This instrument will give the regulators the ability to grant other types of permits, such as standard rules permits and mobile plant permits. Those non-bespoke permits are significantly less costly and reduce the administrative burden on businesses while maintaining environmental standards.
The instrument will also introduce exemptions from the requirement of an environmental permit for new cemeteries that pose a low risk of pollution to the groundwater environment. The public consultation received 264 responses and almost all the proposals received majority support. Following feedback on the cemeteries proposal and further discussion with key stakeholders, adjustments have been made to the cemetery-specific amendments to enable greater clarity and ease implementation issues.
Another aspect of this SI is that controls will be applied to prevent groundwater pollution from currently uncontrolled pollutants such as heat and micro-organisms. As heat will be added as a pollutant, the majority of closed-loop ground heat pump activities will be exempt from the requirement of an environmental permit. The instrument will also help to fix a loophole in the general binding rules for small sewage discharges, which are currently being exploited, resulting in harm to nearby environmental habitats and local water quality. These new rules will reduce the risk of groundwater pollution.
The current wording of the environmental permitting regulations 2016 is unclear on the breach of permit conditions. The instrument will help to bring clarity around the liability of sewage undertakers following a breach of permit conditions due to specific circumstances beyond their control. To bring the regulations in line with current operational practices and facilitate energy recovery and the latest green technology, the current list of exemptions from the prohibition on direct discharges to groundwater needs to be updated. This instrument will update the list.
Finally, there will be a requirement for operators of onshore oil and gas facilities to apply to surrender their groundwater activity permits. Regulators need to be satisfied that any pollution issues are remediated and there are no ongoing risks to the groundwater environment at the point of decommissioning or that may arise in future. This will ensure that the environment is better protected.
These amendments will bring about benefits for groundwater quality, will reduce unnecessary costs to businesses and will also help to ensure that government resources are being used most effectively to protect and preserve groundwater quality for future generations. I beg to move.
Baroness McIntosh of Pickering (Con)
My Lords, I am grateful to my noble friend for presenting the regulations before us this afternoon and the opportunity to put one or two questions. He will recall the history of the attempt to frack—the use of hydraulic fracturing—in North Yorkshire, and that the one reason it was not allowed to happen was because no permit was given for the water supply and the reuse of water.
I am very grateful to the Secondary Legislation Scrutiny Committee for its 36th Report, which says that Defra has no intention of revisiting that issue. Can I press my noble friend the Minister to ensure that there will be no end to the current moratorium on hydraulic fracturing, or fracking, in any part of England, to the extent that it might fall within the regulations before us this afternoon? If there was to be an end to the moratorium, can he give us an undertaking that the Government—whichever department it happened to be, as departments come and go—would actually come before both Houses with revised permitting, with regard to fracking?
I now turn to the Explanatory Memorandum, starting with paragraph 7.16 onwards, relating to groundwater activities and the use of geothermal and other green technologies. Could my noble friend explain whether, if there is a significant risk of introducing microbial pollution, no permit would actually be issued in that regard, whether it is close to a sensitive habitat or not? That is just to understand what the purposes of the permitting are. I understand, in the second paragraph of 7.18, that it does look as though this is going to become a regulated activity, so I would just like to understand entirely what the remit of the department in relation to the regulations would be.
On paragraph 7.22, and an unauthorised illegal third-party discharge into a sewer network, could my noble friend highlight specifically what activity is in play there? Obviously, there is a situation where there is a heavy rainfall and sewage can flow on to a highway and then into someone’s house. I understand that highways authorities currently have no responsibility for any sewage overflow, or do not contribute in any way to reducing flood risk in this regard. Is that a loophole, if you like, that the Government would like to close? Obviously, it is unfortunate at the moment that there are not sufficient sustainable drains in place and that there is no end to the automatic right to connect, which may mean that sewage flowing as wastewater from a four- or five-bedroomed house which has been given planning permission can come into a combined sewer and unfortunately spill into houses, either directly into an existing development, or off a highway. So there does seem to be this loophole that highways authorities are not covered. Is that what my noble friend means by an unauthorised illegal third-party discharge? I am just trying to understand what paragraph 7.22 of the Explanatory Memorandum would cover.
With those few remarks, I otherwise welcome the regulations before us this afternoon.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introductory remarks to this SI. The Secondary Legislation Scrutiny Committee looked at this instrument in April and raised concerns about groundwater quality and sub-surface energy proposals. As a result, Defra revised the Explanatory Memorandum. Those amendments helped to clarify the instrument, but I have some comments and questions.
As the EM states, groundwater “plays a vital role” for food manufacturing, brewing, wetland ecosystems and the agriculture industry, to which the Minister referred in his opening remarks. The quality and purity of this water is vital to many of these, especially chalk streams, the protection of which was debated last week during the passage of the Levelling-up and Regeneration Bill. This instrument indicates that it will update and clarify the existing control measures within the EPR for protecting groundwater from site-based activities. Will this include the discharge of chicken slurry into the River Wye, for instance, or is this classified as not groundwater but surface water? Perhaps those are the same.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I have a heavy cold, so if I start sneezing I apologise in advance.
I thank the Minister for his overview of these regulations. His Majesty’s Opposition agree that the management and protection of our groundwater is vital for sensitive ecosystems and a range of key industries that have already been outlined, so we support these proposed changes to the regulatory framework. However, I have a few questions for the Minister following on from the debate held in the other place.
The environmental permitting regime came into force in 2010, and the amendments made by this SI are described as minor tweaks which
“provide a more proportionate, risk-based regulatory approach”.
Although the changes might be considered minor, and although we have no major objections, could the Minister outline when during the last 13 years various deficiencies referenced in paragraph 7.10 of the Explanatory Memorandum were identified and why it has taken so long for the revisions to be brought forward?
As highlighted by the noble Baroness, Lady McIntosh of Pickering, the Secondary Legislation Scrutiny Committee’s comments on the SI focus in part on its potential implications for the use of technology such as hydraulic fracturing. Although Defra says that it is not currently aware of any proposals for low-volume, low-pressure fracturing in deep formations containing groundwater in the onshore oil and gas industry, can the Minister outline any specific stakeholder engagement on the issue and say how long it will be kept under review and reported on should the situation change?
In the House of Commons, the Minister, Rebecca Pow, committed to write in response to specific questions on sewerage undertakers’ liability for certain offences under the EPR. Does the Minister have a copy of that correspondence that could be read into the record? If not, is he able to provide a copy to participants?
Finally—without sneezing—this new suite of potential exemptions will require enhanced monitoring and enforcement arrangements. How confident is the Minister that the Environment Agency has the resources to oversee the additional workload, given that research published by Unchecked UK states that the EA has seen cuts equivalent to 25% of its staffing base and 63% of its funding since 2009?
Protection of our delicate ecosystems in the coming decades is a responsibility that falls on all of us, especially given the challenges posed by climate change, so it is vital that we get the regulatory framework correct and have the enforcement structures in place.
Lord Benyon (Con)
I am grateful to your Lordships for your important contributions to this debate and for what I sense is support for the amendments to the 2016 environmental permitting regulations. These amendments will optimise the regulatory tools available for managing and protecting groundwater quality. I am delighted that we are delivering on the Government’s commitment to ensuring that the quality of our groundwater resources is protected.
I will now address the points made. First, my noble friend Lady McIntosh and the noble Baroness, Lady Anderson, raised hydraulic fracking. The Government’s moratorium on high-volume, high-pressure hydraulic fracking for shale gas is very much still in place. Hydraulic fracturing is already permittable in some geological formations. The amendment will allow control through permitting of stimulation techniques including hydraulic fracturing in all formations that have the potential to release heat and energy, but only where it is demonstrated to be environmentally accessible. I make the point to my noble friend and all noble Lords that there is no change or diminution in protections; it just allows us to have a system that is more suitable to the problems with which we are dealing.
Treated sewage effluent discharges can contain high numbers of microorganisms, including harmful pathogens. Where such discharges occur very close to private drinking water supplies, the risk of potential harm to health increases. This amendment provides the ability for the regulator to apply proportionate, risk-based controls to prevent microbial pollution where the risk deems it necessary.
The existing environmental permitting regulations specify that a water company sewerage undertaker is not guilty of an offence relating to discharging sewage effluent under certain conditions, such as if a third party made an unauthorised discharge into the sewer, resulting in a discharge from the works breaching the permit conditions at that site. That is fair. However, the defence applies only to the offence of operating without a permit, not the offence of contravening permit conditions, which is more commonly the case.
This change is necessary because that situation creates uncertainty for water companies and enforcement difficulties for the Environment Agency. The amendments provide legal clarity for the Environment Agency to be able to take enforcement actions, including prosecutions, with more certainty of success, and do not reflect the previous legal position where the defence was open to both offences of operating without a permit and in breach of permit conditions.
On the point about chicken slurry in the River Wye, that is not classified as groundwater so these regulations do not apply in those circumstances. However, we are tackling that issue through a variety of different actions to protect that important river environment.
The noble Baroness, Lady Bakewell, also asked what we are talking about here. An example would be a SSSI, which we have a vital duty to protect. We want to see 75% of them in good condition in just a few years’ time.
The noble Baroness asked about the definition of a mobile plant permit. It is a type of environmental permit used to regulate shorter-term, temporary activities which utilise equipment that is designed to move from site to site. Discharges into river are separate from discharges to groundwater; both need permits to discharge pollutants into the environment.
On the question of geothermal schemes, only proposed systems in sensitive groundwater locations will need a permit from the Environment Agency. This means that the use of this green energy technology is still an option in locations that cannot meet the exemption conditions, and any potential impact on groundwater quality can be controlled.
On the questions relating to the consultation, the public consultation was held from September to December 2021 to seek views on the nine amendments. The draft statutory instrument was published on 23 March 2023. As I said, there were 264 responses to the consultation. Overall, there was majority support for the consultation, except for the proposals to mitigate potential groundwater impacts from cemeteries, which showed clear opposition. I have some knowledge of this issue. When I was in the other place there was an application to create a green burial ground—the sort of land use which I think many of us would support; it is a type of burial that is particularly attractive to individuals and their families who want one which is perhaps more environmentally friendly. Some of the misunderstandings about the impact of that resulted in me, as the MP, receiving letters saying that body parts would be found floating down the river, and things like that. That is not the case. These burials are very much in keeping with the environment. They need licensing, as do any such schemes, and this will allow us to have better systems of protection.
The noble Baroness raised a point about garden burials; I may have to contact her with details. Due to the low intensity of the impact of such burials, I do not think that is important.
On the question of why this SI has been brought forward and why it has been delayed, I am absolutely happy to explain to the Committee that the current changes are a long-standing issue that has been delayed several times due to reprioritisation during EU exit and Covid. Improving the regulatory regime for groundwater is a priority for this work by reducing regulatory burdens and freeing business to grow and invest.
I will find out about the letter from my honourable friend Rebecca Pow. We are not sure where it is in the process, but I am certainly happy to share it with Members of the Committee.
In conclusion, I hope I have addressed the points raised by your Lordships and thank you again for your contribution. I commend the regulations to the Committee.
Energy Bills Discount Scheme Regulations 2023
(12 months ago)
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Lord Callanan
That the Grand Committee do consider the Energy Bills Discount Scheme Regulations 2023.
Relevant document: 38th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, these regulations were laid before the House on 25 April this year, as were the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023, the Energy Bills Discount Scheme Pass-through Requirement Regulations 2023, the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 and the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023.
These instruments ensure that essential energy bill support continues to be provided to eligible UK businesses, charities and public sector organisations, following on from the energy bill relief scheme support, which ended on 31 March this year. Each of them is a replacement for an earlier set of regulations that implemented that original scheme. Together, they cover UK businesses that are supplied by both licensed gas and electricity suppliers and licence-exempt suppliers. They also ensure that any end user receiving energy that is supplied with the benefit of these schemes through an intermediary will get a “just and reasonable” share of that benefit. In the absence of an intervention of this kind, energy bill support would no longer be provided to non-domestic customers where they were exposed to the impact of high wholesale market prices.
The Energy Bills Discount Scheme Regulations for Great Britain, the Energy Bills Discount Scheme (Northern Ireland) Regulations, the Energy Bills Discount Scheme (Non-Standard Cases) Regulations, the Energy Bills Discount Scheme Pass-through Requirement Regulations and the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations, which I will refer to collectively as the “EBDS Regulations”, have been created under the Energy Prices Act, which the Committee will recall gained Royal Assent on 25 October last year.
The Energy Prices Act, introduced in Parliament on 12 October last year, provided the legislative footing needed to ensure that businesses across the UK receive support with their energy bills through the energy bills discount scheme. The EBDS regulations are essential secondary legislation needed to implement and operationalise the scheme. The purpose of the regulations is to provide a discount on the wholesale costs for electricity and gas supplied by licensed and non-licensed energy suppliers to eligible non-domestic customers, and to make payments to suppliers in respect of those reductions in Great Britain and Northern Ireland. To protect eligible non-domestic customers from excessively high energy bills, the EBDS will run for a 12-month period from 1 April this year to 31 March 2024.
I thank the Secondary Legislation Scrutiny Committee for reviewing these regulations. We welcome the conclusion it reached and that it took some assurance regarding the effectiveness of the energy bills relief scheme pass-through requirements. I reaffirm that we will continue to monitor the effectiveness of the EBDS and that we expect to publish a report on both the Great Britain and Northern Ireland EBDS before the end of 2024, including the effectiveness of the pass-through requirements. We will continue to review our pass-through requirement communications strategy, including reviewing guidance on GOV.UK and offering engagement sessions to ensure that intermediaries understand their obligations and that customers receive the benefits that they are entitled to.
I turn to the details of the regulations. The EBDS regulations set out that, with few exceptions, all non-domestic customers with electricity and gas contracts from both licensed and licence-exempt non-domestic energy suppliers will be eligible for a discount when the wholesale element of their contract is above a certain level. Licence-exempt supply includes energy taken from the public electricity grid or received via wire or pipe.
The EBDS GB and EBDS Northern Ireland regulations provide for three elements to the scheme for end users of licensed suppliers. The EBDS (Non-standard Cases) regulations replicate this for end users of licence-exempt suppliers. First, there is a baseline per unit discount applicable to all eligible non-domestic customers’ energy bills throughout the scheme’s duration. The discount will be applied if wholesale prices are above a certain price threshold. Secondly, a higher rate of relief will be provided to those non-domestic customers that carry out a substantial part of their UK activities in certain energy and trade-intensive industry sectors—so-called ETIIs.
Thirdly, there is the support aimed at domestic customers on heat networks. There will be a specific higher EBDS rate for heat networks supplying domestic customers set at a level to ensure that these customers do not face disproportionately higher prices than other domestic customers receiving the energy price guarantee. The EBDS regulations set out the process by which the energy supplier is reimbursed by the Secretary of State for the discounts that it gives. The EBDS (Northern Ireland) Regulations prevent end users who are outside Northern Ireland receiving the discount to their bills.
Finally, the EBDS regulations set out essential operational matters, including information and reporting obligations, enforcement powers and powers to impose civil penalties in respect of missing or defective declarations. Customers who receive gas or electricity from non-licensed suppliers—non-standard cases—will be supported under agreements on standard scheme terms. Due to the complexity of some licence-exempt supply chains, the non-standard cases regulations provide the Secretary of State with powers to obtain information from those involved and imply some terms into the contracts to help the scheme work more smoothly. Additionally, the regulations allow for revised EBRS terms, which expand eligibility under EBRS to include the cohort of non-standard customers who receive their energy via private wire or pipe, at a price pegged to wholesale rates.
The EBDS Pass-through Requirement Regulations, EBDS Pass-through Requirement (Heat Suppliers) Regulations, and EBDS (Non-standard Cases) Regulations provide for certain intermediary businesses, often landlords, that receive a benefit under the scheme but in turn provide energy to others to pass a just and reasonable amount of the benefit that they receive on to their end users. The regulations set out obligations on the intermediary, including calculating the amount and providing end users with information about this, as well as passing on the benefit as soon as reasonably practicable. They also set out the dispute mechanisms available.
To accompany the regulations, we have published a suite of non-statutory guidance, which provides further detail on how the schemes work. The objectives of these regulations are to protect businesses and non-domestic customers against the volatility of the variable market and avoid firm closures and redundancies, particularly for ETIIs. They also ensure that domestic end users on qualifying heat networks are offered appropriate support.
In conclusion, the EBDS schemes will be a source of critical support for non-domestic customers in the UK, particularly those in energy-intensive sectors, many of which are essential national infrastructure. I emphasise that the measures in these regulations are crucial, because they bring the schemes into legal existence. The EBDS Great Britain, EBDS Northern Ireland and EBDS non-standard cases schemes complement the existing large-scale support that the Government are providing during the energy crisis.
I hope the Committee will support these measures and their objectives, and I commend the regulations to the Committee.
Lord Teverson (LD)
My Lords, that is quite a long introduction, and I thank the Minister for it. I have to admit to him that I was looking around at the pictures, and thinking that it was interesting that Moses managed to base Judaeo-Christian law on 10 paragraphs, whereas here we have about 100 pages on energy. We will perhaps move on to that.
I wanted, while not trying to be disingenuous, to actually congratulate the Government on something in these particular instruments. In the instrument on heat suppliers, no. 455, on page 12, in paragraph 1E(6)(c), we actually have the court being able to apply a fine of up to £5,000 in terms of enforcement, which is how I read it. I thought, “bingo”: there is actually a way in which, when we go through all these pass-through regulations, we could actually have something which might appear like a civil on-the-spot fine, which is a way to deter or provide some jeopardy if these pass-through arrangements are not adhered to. But needless to say, in instrument no. 463, we are back to the 2% on the outstanding amount. I am not asking the Minister to go through that again, but I genuinely believe that there was a sensible solution in terms of enforcement and that sort of approach, which could have been used in the other SIs.
On the energy and trade-intensive industries, one of the sectors that is not there is agriculture. I know that the Minister has a very good relationship with Defra, but I wondered whether he could perhaps take back again the fact that the horticulture sector—poultry, I understand, as well—is equally energy intensive, yet that primary industry sector has been left out. I realise, clearly, that this SI cannot be amended to do that, but I show my regret in this context that the agricultural industry has been left out of that. Perhaps the Minister would like to offer an explanation of why.
There is a cap here, which I am not necessarily against, of £5.5 billion. Is it on a first come, first served basis, or are the Government completely assured that that limit will not be hit?
Lastly, my only other question is whether the Northern Ireland situation has been sorted out with the European Union, in terms of approval, which I understand is in process.
Baroness Blake of Leeds (Lab)
I also add my thanks to the Minister for his fulsome explanation of the regulations before us today. I think we are on record as saying that we were disappointed with the delay at the beginning, but I think we can now say that it seems as though the mechanisms are up and running, and delivering for the people who desperately need this support provided.
I do not want to go over all of the points that have been covered and raised, but I have a couple of questions, particularly with reference to the Energy Bills Discount Scheme (Non-Standard Cases) Regulations. The noble Lord, Lord Teverson, raised the agricultural sector; that is one to consider. Could the Minister anticipate whether there will be other areas coming forward that are struggling and are not covered under this provision? As we know, this area is regarded as a relatively small part of the market. “Relatively” is a very broad definition, and I would like to know whether the Government actually know the precise size of this area as we go forward.
One area that we have raised on several occasions is the whole area of implications for vulnerable customers and the provision that is laid out for intermediaries to cover. We recognise that the Government are developing a guidance and communication strategy to ensure those intermediaries are aware of their obligations, and therefore pass on the support as required.
Lord Callanan (Con)
I thank the noble Lord, Lord Teverson, and the noble Baroness, Lady Blake, for their valuable contributions. I start by saying that the Government have implemented the EBDS to protect businesses and non-domestic consumers from the volatility of the market and, of course, to deliver critical energy bill support, while also taking account of the fact that wholesale prices are now well below previous levels seen during the peak of the energy crisis. The schemes have been designed to operate robustly and guard against fraud and gaming. We will continue to monitor the schemes to ensure that this support is provided to the people and businesses it is designed to help.
I will now respond to the questions raised by both noble Lords. As the noble Lord, Lord Teverson, pointed out, the regulations require that relevant intermediaries, including landlords, claim the benefit and pass it on to end-users. Intermediaries must take all such reasonable steps necessary to ensure that they are provided with the energy bills discount scheme benefit to which they are entitled, so that they may pass it on to their end-users.
We have taken a consistent approach to determine ETII eligibility. Organisations that operate primarily within an eligible sector will be eligible for the support. This means that about 50% of UK revenue generated in the relevant period must be from activity in an eligible sector. I am sorry to tell the noble Lord that the Government currently have no plans to review the eligibility criteria for the energy and trade intensive element of the EBDS. The Treasury-led review of the energy bill relief scheme took account of many contributions from the private sector, trade associations, the voluntary sector and other types of organisations, and the list is what we ended up with following that.
Finally, I can confirm to the noble Lord, Lord Teverson, that discussions with the European Commission are ongoing, and we hope to reach a conclusion on them soon.
The noble Baroness, Lady Blake, also raised the role of intermediaries and pass-through. As she said, we will continue to monitor the effectiveness of the pass-through regulations as well as our communications strategy for communicating to end-users. Detailed guidance has been produced on GOV.UK to help ensure that consumers and intermediaries, and those who advise them, are aware of the specifics of the scheme.
With regard to the noble Baroness’s point on non-standard cases, we have engaged with a range of stakeholders, and the extended eligibility announced on 1 April means that non-domestic customers on private wire networks are now supported. This includes businesses receiving energy from biomass and waste, to give two examples. The Government remain committed to ensuring that consumers continue to receive help with the rising cost of living, which at the moment includes energy bills. These regulations are vital in ensuring that support is delivered to non-domestic customers and, crucially, to domestic heat network consumers. I therefore commend them to the Committee.
Lord Teverson (LD)
On Northern Ireland, I am interested to understand whether the Commission is being difficult and finding objections or whether it is just a question of it taking the time that it takes.
Lord Callanan (Con)
The noble Lord will understand that I do not want to go any further at the moment. It is a sensitive area. We are engaging in discussions with the Commission and hope to reach a decision soon. I very much hope that it is not just being deliberately difficult but is seeking the necessary reassurances with regard to the state aid regulations.
Energy Bills Discount Scheme Pass-through Requirement Regulations 2023
(12 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Energy Bills Discount Scheme Pass-through Requirement Regulations 2023.
Relevant document: 38th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023
(12 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023.
Relevant document: 38th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023
(12 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023
Relevant document: 38th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Energy Bills Discount Scheme (Northern Ireland) Regulations 2023
(12 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023.
Relevant document: 38th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)