Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023
Lord Callanan Excerpts(1 year, 6 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)
Retained EU Law (Revocation and Reform) Bill
Lord Callanan ExcerptsMonday 22nd May 2023
(1 year, 6 months ago)
Lords ChamberRead Full debate Retained EU Law (Revocation and Reform) Act 2023 View all Retained EU Law (Revocation and Reform) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 139-I Marshalled list for Third Reading - (19 May 2023)
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, I am disappointed to inform the House that both the Scottish Parliament and the Senedd Cymru have voted to withhold consent for the REUL Bill.
Lord Callanan (Con)
I am sure we are all shocked to hear that. We acknowledge the concerns of both Parliaments regarding the Bill and the potential impacts on devolved areas. However, it is right and constitutionally appropriate that the REUL Bill applies UK-wide. This will ensure that the benefits of Brexit can be realised by citizens and businesses throughout the whole United Kingdom. The Government therefore intend to proceed with the Bill without their consent. As noble Lords will be aware, the ongoing absence of the Northern Ireland Executive and the Assembly means that it has not been possible to seek legislative consent from the Northern Ireland Assembly on this Bill.
I reassure the House that it was never our intention to proceed with the Bill without consent in place. Our preference would have been to secure legislative consent Motions from the devolved legislatures. The Government have sought to engage proactively with the devolved Administrations on the REUL Bill since March last year. We have listened to their concerns and sought to make meaningful changes to the Bill in response. This includes the amendment to the sunset and the conferral of the powers to make consequential and transitional, transitory and savings provisions to the devolved authorities and devolved Ministers.
The decisions of the Scottish Parliament and the Senedd, while regrettable, will never mark the end of our engagement with the devolved Administrations on retained EU law. We remain committed to supporting sustained engagement with them on the REUL Bill and the REUL reform programme going forward.
Amendment 1
Baroness Chapman of Darlington (Lab)
My Lords, the noble Baroness, Lady Noakes, commented that we were rather less than enthusiastic when we discussed this issue last week. I can see why we have got to the position where this amendment has been agreed between the noble Baroness and the Government, and I am very happy for her that she feels satisfied with the movement that the Government have made in getting here. I am afraid that the concerns we have had throughout this process are a long way from being satisfied by the amendment. We do not oppose it particularly, but we are not particularly in favour of it. It does not really do all that much to the substance of what we have been disagreeing about during the passage of the Bill. However, if it helps with some internal political management on the government Benches, that is something that the Minister is entitled to attempt to do.
Lord Callanan (Con)
Well, my Lords, if the Opposition are not enthusiastic about my noble friend’s amendment, I am.
Before I address the amendment, I shall deal with some of the points that Members have raised. First, on the point made by the noble and learned Lord, Lord Hope, the noble Lord, Lord Fox, and my noble friend Lady McIntosh about post-devolution rule, that is rule for the devolved Administrations. The reality is that they have not wanted to add anything to the dashboard, and of course we are in no position—and do not wish to force them—to do so. If they wish to add some of their rule to the dashboard then they can, but for now it is just rule made by Her Majesty’s Government. It of course contains UK government legislation that has been made post devolution—just not the rule made by the devolved Administrations.
To answer my noble friend Lady McIntosh’s point, the dashboard has no legal status as such; it is just a list of retained EU law.
Moving on to the main points about my noble friend Lady Noakes’s amendment, the Government have already reformed or revoked over 1,000 pieces of retained EU law, but that is not the limit of our ambition. Departments will continue to review the rule that is not already revoked, reformed or planned for revocation this year in order to identify further opportunities for reform, and we are committed to reducing the burdens on businesses and unlocking the economic growth that will flow from that. As a down payment on our commitment to deliver meaningful reform, the 10 May policy paper Smarter Regulation to Grow the Economy set out our intention to reform regulations and remove burdens on businesses.
We announced changes that will reduce disproportionate EU-derived reporting requirements and could save businesses around £1billion a year. This will just be the first in a series of announcements that the Government will be making in the coming months on reforming regulation in order to drive growth. In addition to the revocation schedule, the powers in the Bill will still enable us to revoke, replace or reform any outdated EU laws that remain on our statute book right through until 2026. This new approach will provide the space for longer-term and more ambitious reforms and the Government intend to do just that. It will also mean that fewer statutory instruments will be required to preserve EU laws that are deemed appropriate or necessary to maintain.
The Brexit Opportunities Unit, spearheaded by the Secretary of State for Business and Trade, has been pivotal in driving the development and delivery of the Retained EU Law (Revocation and Reform) Bill and the wider associated retained EU law reform programme. These efforts are being supported by specialist legal expertise from outside government. Parliament will be able to easily monitor government progress on REUL reform, as we update the dashboard every quarter. That answers the point made by the noble Lord, Lord Fox: we will continue to update the dashboard.
Baroness Jones of Moulsecoomb (GP)
Did I understand the Minister correctly? Has he just boasted that there will be less parliamentary scrutiny and that we can look it up online?
Lord Callanan (Con)
You can look up progress online, but of course there will be parliamentary scrutiny. If we propose to make any changes to retained EU law using the powers in the Bill, they will come to Parliament in the normal process of the examination of secondary legislation.
The Brexit Opportunities Unit drove the aforementioned 10 May regulatory reform announcement, setting out a long-term plan to reform UK regulation over the coming months. Furthermore, we have committed to future announcements on how we will reform regulations to reduce the cost of living, deliver choice to consumers, establish trailblazing regulation to catalyse innovation and make the UK a science superpower, and remove obstacles to building world-class infrastructure.
However, it is crucial that Parliament and the public are able to hold the Government’s feet to the fire and ensure that our momentum continues with regard to the retained EU law reform programme. I am therefore delighted to support Amendments 1, 2 and 3, tabled by my noble friend Lady Noakes, to which I have added my name. These amendments insert a new clause into the Bill requiring the Secretary of State to update the retained EU law dashboard and to report on the revocation and reform of retained EU law in periods up to 23 June 2026, at which point, of course, the main powers in the Bill will sunset, and the vast majority of retained EU law reform will have been completed. The reports will summarise the REUL dashboard data, provide an update on whether and how REUL on the dashboard has been revoked and reformed, and detail future plans for further revocation and reform.
I thank in particular my noble friend Lady Noakes for her collegiate engagement in preparing the amendments that she has tabled today. I also extend my thanks to my noble friends Lord Frost, Lord Jackson and Lady Lawlor for their valuable engagement on this matter. These amendments will hold the Government to account in providing the additional transparency both Parliament and the public need to scrutinise the Government’s progress and future plans on retained EU law reform. I therefore hope the House will join me in supporting these amendments.
Lord Carlile of Berriew (CB)
I am grateful to the Minister for giving way. He has just told us that these amendments will hold Parliament to account. If Parliament is not satisfied with the account it is given under these amendments, what advice would he give to Parliament as to how Ministers can be prevented from carrying out what they have tried to do?
Lord Callanan (Con)
Well, they will hold the Government to account. Of course, Parliament is able to hold the Government to account in many different ways, but particularly, with the reform programme, there would be an extensive programme of statutory instruments. Parliament would be able to debate and accept those instruments or not, as it usually does.
Baroness Noakes (Con)
My Lords, I thank all noble Lords who have spoken in this debate. I thank my noble friend Lord Callanan in particular for answering the points raised on devolution. I do not think he answered the points raised by the noble Lord, Lord Pannick, on subsection (4), which is a useful addition because it means that if a report is not laid, we get another opportunity to be told that it has not been laid, and thereby to trigger any accountability mechanisms. I regard it as an important additional subsection, and I shall certainly be using it as a precedent in amendments to other Bills in future.
Lord Callanan (Con)
My Lords, this Bill is crucial in ensuring, as I said earlier, that we can seize the regulatory reform opportunities of Brexit. It is the next step in reasserting the sovereignty of Parliament and untangling the United Kingdom from nearly 50 years of EU membership. Through the Bill we will improve legal certainty, removing confusion from our statute book where EU principles of interpretation overlap with those of UK domestic principles. This fulfils an important constitutional objective: that our law is clear and accessible, so that citizens can understand it and regulate their conduct accordingly.
There is a long list of people whom I wish to thank for their help on the Bill. Let me start with my noble friend Lady Bloomfield of Hinton Waldrist. Sadly, my noble friend is leaving the Front Bench and she will be missed by us all. My chances of getting to the Chamber on time are greatly reduced without the hurry-up texts from my noble friend Lady Bloomfield, who has kept me right many times in this Chamber and when we have debated statutory instruments in the Grand Committee. I am hugely grateful for all the help and support that she has given to me; I am sure other members of the Front Bench feel the same. She will be a great loss to the Government.
Let me also thank my noble friends Lady Neville-Rolfe and Lord Benyon, and my noble and learned friend Lord Bellamy, for their support during the Bill’s passage. I fear I would have continuously sat on this Bench for a great many days in addition to those when I did without their help and support, which has been greatly appreciated.
Let me also give my thanks to the Bill team. All the Bill teams I have worked with have worked extremely well and tirelessly, but I can tell the House that this Bill team in particular has gone above and beyond the call of duty. I said this when there were some frankly ill-considered remarks about the Civil Service while we were on Report, but many of them really did work all weekend to get the explainer out for the benefit of noble Lords when we were discussing the schedule. Their assistance has been great and their legal advice superb. If there were legal errors in anything that I said, I can assure noble Lords that it was not their fault. The fault was entirely mine, as they did a great job in trying to explain some of these complicated concepts.
I also thank members of the Opposition, including the noble Baroness, Lady Chapman, the noble and learned Lord, Lord Hope, my noble friend Lord Hodgson—who is of course not a member of the Opposition but is on our own Benches and played a big role in the Bill—and the noble Lord, Lord Fox, among many others who contributed to its passage. We did not always agree on many parts of it, of course; I apologise if, from my point of view, I sometimes expressed a little bit of irritation with some of the speeches that were made. Nevertheless, I do accept that it is the job of the House to scrutinise the Government, to look at our legislation closely and to propose amendments. If we could perhaps have a bit more constructive opposition sometimes, I would appreciate it.
Lord Callanan (Con)
Nevertheless, the contributions are appreciated.
The Government have of course sought to address the concerns raised, notably around the sunset and courts provisions. We listened to the points made in the House and addressed those concerns via the amendments that we brought forward on Report. I hope that the House recognises how significant a move this was from the Government and takes that movement in the spirit in which it was intended. We really did try to alter the Bill to take account of many of the concerns that were addressed.
The House has also made its views known on some other areas of the Bill on which the Government do not agree, including the reform and repeal powers we believe are crucial to the ambitions we have in this space. Our work in producing the retained EU law dashboard highlighted that there are many defunct laws on our statute book relating to activities that the UK does not conduct, such as my famous example of regulating reindeer herdsmen in Lapland. Now that we have taken back control of our statute book, it is appropriate to update it by amending, repealing or replacing REUL that is no longer fit for the UK.
I do not think there is much argument on all sides of the House about the list of measures we have produced that deserve to be repealed. This will allow us to create new pro-growth, high-standard regulatory frameworks that give businesses the opportunities and confidence to innovate, invest and ultimately to create jobs. This Bill delivers, in addition to providing clarity and certainty. It provides the powers for the Government to make legislative changes that will benefit all of us in the United Kingdom. With that, I beg to move that the Bill do now pass.
Lord Fox (LD)
My Lords, I thank the Minister for his speech. His answer to the question asked by the noble Lord, Lord Carlile, indicates why what I will call the Hope-Hamilton amendments are so important. I hope it is clear to the Minister that your Lordships’ House considers these to be very important and that they should be retained rather than reversed when they head to the other place.
Any Commons reversal of Amendment 48 will be seen as a show of intention by the Conservative Party on environmental legislation. Again, it would not be wise, given the very good reassurance we have had from the noble Lords, Lord Benyon and Lord Callanan, on retaining that legislation. Pushing out Amendment 48 would be moving things in the opposite direction.
Overall, the work of this House has achieved a major change and a U-turn. As I said before, it has achieved a reverse in the polarity of this Bill, and noble Lords should be very proud of that. It has been a fraught debate at times. I owe a mea culpa to the noble Baroness, Lady Fox. In the hubbub I misrepresented her use of the term “blob”, and I am happy to put the record straight—so apologies there. During that debate there was also a to and fro, which was very important. The Minister is right to say that that is the role of this House.
I thank the Ministers—the noble Baronesses, Lady Bloomfield and Lady Neville-Rolfe, and the noble Lords, Lord Benyon and Lord Bellamy—for their hard work in trying to bring us along; they have not often or always succeeded, of course. The Bill team, when we have met, have always been very helpful and courteous; they are a credit to their service. I hope that, for those of the team who want to visit the Cheshire salt mines, I have in some way helped them head that direction.
His Majesty’s Opposition have been a pleasure to work with: I thank the noble Baroness, Lady Chapman, the noble Lord, Lord Collins, and of course the team in their Whips’ Office. Many Cross-Benchers and other noble Lords across the House have participated fully. It would be difficult to mention them all, but for his virtuoso display during Report, the noble and learned Lord, Lord Hope, deserves the full gratitude of your Lordships’ House.
Quite a few Liberal Democrats have participated in the Bill, not least those who were mobilised over the weekend to try to review 600 laws and work out what they did. I am not going to name them all, but I thank them for their support. I will name my noble friend Lady Ludford, who unfortunately cannot be here; she has been able company for me on the Front Bench. Finally, I thank Elizabeth Plummer in our Whips’ Office, whose grasp of this Bill has been beyond compare.
Energy Bills Discount Scheme Regulations 2023
Lord Callanan Excerpts(1 year, 6 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.
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
Lord Callanan Excerpts(1 year, 6 months ago)
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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
Lord Callanan Excerpts(1 year, 6 months ago)
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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 (Northern Ireland) Regulations 2023
Lord Callanan Excerpts(1 year, 6 months ago)
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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)
Retained EU Law (Revocation and Reform) Bill
Lord Callanan ExcerptsWednesday 17th May 2023
(1 year, 6 months ago)
Lords ChamberRead Full debate Retained EU Law (Revocation and Reform) Act 2023 View all Retained EU Law (Revocation and Reform) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 117-II Second marshalled list for Report - (15 May 2023)
Baroness Chapman of Darlington (Lab)
My Lords, I was surprised when I saw this amendment. I have now spent 13 years in opposition in this and the other place, tabling such amendments at just about every opportunity. When you know that the Government are not going to do what you want them to do, one of the things left to you is to ask the Government to report annually or six-monthly to both Houses on whatever the issue might be. I have done this on everything from women’s justice to food standards to access to medicines. It is an in your back pocket kind of amendment—the sort that Ministers usually bat away quite easily. They talk about the cost and how much Civil Service time would be taken up in preparation. They do not want to use up valuable parliamentary time to debate these things, nor to distract Ministers with these sorts of fripperies.
On this occasion, it seems that the Government have decided that they can afford the time, money and resources to compile this list—to keep the argument alive for some people within the Conservative Party. What has happened to the noble Lords, Lord Frost and Lord Jackson? The tigers of Brexit are being bought off by an annual report to both Houses of Parliament. This is the sort of thing that the Opposition would have settled for at any point. There they are, taking this at what is meant to be the climax of their Brexit mission. I am quite disappointed that this is all the noble Lords have sought to achieve at the end of all this. They must be quite disappointed, although at least they get to have their report each year, to raise things and to ask why this or that regulation has not yet been dealt with. This is not going to be a red-letter day in my diary but, if it keeps the flame burning for others, then so be it.
I have to ask the Minister the same questions that he would ask me if the roles were reversed. Who will be compiling this list of regulations? How much time will they be spending on it? What is the cost? Will there be an opportunity to debate this report in Parliament each year? What format will this take, or will it go to a Select Committee? I wonder about the Government’s priorities. They find time to undertake this task when mortgages are soaring, inflation is still high, people are dying waiting for treatment, unable to see their GP and are pulling their own teeth out. This is what is going on in the country and yet the Government make this a priority.
I understand that the Government intend to accept this amendment, despite everything they have managed to do. They have completely rewritten their Bill. They have shown a little bit of backbone in doing that. I give credit where it is due. Now, at the 11th hour, they think that this is going to get them over the final hurdle. I am disappointed in the Minister for falling at the final fence. I am particularly disappointed in the noble Lords, Lord Frost and Lord Jackson, for settling quite so easily. There we are. I do not think we will bother to oppose the Government on this. Given everything else that has been going on, it does not seem worth the time of the Chamber to do so. This was quite a surprising, last-minute event in the process of this Bill.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, I thank the noble Baroness, Lady Chapman, for what must be the most cynical speech I have heard on this Bill so far. We have seen just how committed the Opposition are to any kind of serious reform. They were perfectly to accept all this legislation which was imposed by the European Union through the various processes—before the noble Baroness, Lady Ludford, corrects me. Now Labour is not interested in any kind of reform of it. It is perfectly happy to live with it. It shows the true colours of the Opposition.
Nevertheless, I am of course pleased to say that the Government have already reformed or revoked more than 1,000 pieces of retained EU law. But I agree with the contributions of my noble friends Lady Noakes, Lord Jackson, Lady Lawlor, Lord Frost and Lord Shinkwin—but this should not be the limit of our ambition. The answer to the noble Baroness, Lady Chapman, is that the retained EU law is already listed in the famous schedule, and, if she accesses this internet thingy, she can get a list of all the remaining retained EU law. Departments will continue to review all the retained EU law that has not already been revoked, reformed or planned for revocation this year, to identify further opportunities for reform. We want to do this because we want to reduce the burdens on business, generate more jobs and unlock the potential for economic growth. Again, we can see where the Opposition’s true priorities are in that agenda.
Lord Callanan
Member’s explanatory statement
This amendment extends the consequential power in clause 20 to devolved authorities.
Lord Callanan
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 24, line 14 to leave out “Minister of the Crown” and insert “relevant national authority”.
Lord Callanan
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 24, line 14 to leave out “Minister of the Crown” and insert “relevant national authority”.
Lord Callanan
Lord Callanan (Con)
My Lords, Amendment 64 introduces a new schedule to the Bill that will serve as the revocation schedule. The amendment, in effect, introduces the pieces of legislation due to be revoked by the Bill, as trailed in the amendments in my name, which we discussed on Report on Monday. There are 587 pieces of legislation on the revocation schedule. Each instrument has been included following a thorough review by officials and Ministers. For clarity, it is split into two parts, the first covering EU-derived subordinate legislation and the second encompassing retained direct EU legislation.
I will now speak to a few of the specific entries in which noble Lords have expressed some interest. Amendment 64A would remove Regulations 9 and 10 of the National Emission Ceilings Regulations 2018 (S.I. 2018/129), which are no longer in force. Similarly, Amendment 64B would remove the Commission Implementing Decision (EU) 2018/1522, which is no longer in force, from the revocation schedule, thereby preserving it in domestic law.
The relevant regulations and implementing decision relate to the preparation of a national air pollution control plan, which was required by the national emission ceilings directive. As such, these two pieces of legislation are intertwined, and therefore I will speak to them together.
The NAPCP is a common format required of all EU member states to set out the policies and measures being considered to meet the national emission ceilings targets. The current format of the NAPCP is long, complicated, resource intensive and duplicative. Removal of the regulations relating to the NAPCP will allow us to move away from the overly burdensome system that we inherited from the EU. A large majority of the information in the NAPCP is reflected in individual national strategies and more accessible documents, including the Environmental Improvement Plan for England. Removing the NAPCP would therefore remove this duplication in the public domain, streamline communications on the air pollution policy with existing national strategies and better focus on what will actually help to clean up our air.
As we are appealing only Regulations 9 and 10 of the National Emission Ceilings Regulations, the rest of these provisions will remain in force, including the national emission reduction targets, which are set for five key pollutants, and the requirements to publish UK-wide emissions inventories and projections. With that explanation, I hope that the noble Baroness, Lady Hayman, will not move her amendments.
Amendment 64ZA would remove the Water Resources (Environmental Impact Assessment) (England and Wales) Regulations 2003, which are no longer in force, from the revocation schedule. These regulations were intended to complete the implementation of the environmental impact assessment directive for certain agricultural water resources projects. The regulations impose procedural environmental impact assessment requirements on water resources management projects for agriculture, including agricultural irrigation projects and water abstraction projects that are not accepted under Section 27 of the Water Resources Act 1991 and that are not subject to environmental impact assessment under other regulations.
When these regulations were made in 2003, it was considered that there might be a potential gap in our environmental assessment of agricultural water management projects. This was because a project might well proceed and not be linked to land use, the planning processes or the need for environmental assessment. Moreover, it might not be linked to the need for environmental assessment linked to the requirement to obtain water abstraction or impounding licence from the Environment Agency in accordance with the Water Resources Act 1991. In fact, this gap in regulation was never realised in practice and was filled when we removed water abstraction licence exemptions from all forms of irrigation from 1 January 2018 by commencing provisions in the Water Act 2003. Accordingly, therefore, Defra officials do not consider that there are any other types of agricultural water management projects for which an environmental assessment is required that are not already covered by abstraction and impounding licences or other EIA regulation and would be a relevant project under regulations. Therefore, these regulations are no longer required, which is why they are proposed for revocation. In addition, we understand that no environmental impact assessments have been made under the regulations since 2003. Therefore, I hope that the noble Baroness, Lady Bakewell, will not move her amendment.
Amendment 64ZB would remove the Foodstuffs Suitable for People Intolerant to Gluten (England) Regulations 2010, which are no longer in force, from the revocation schedule. This has been raised a number of times by the noble Baroness, Lady Brinton, who has been in contact with the FSA on this issue. We have also been working closely with the FSA, which has assured us that it has carefully examined the eight pieces of legislation that it has put on the schedule, and that removing them will not impact on the safety or standards of UK food. The regulations referenced in Amendment 64ZB provided for the execution and enforcement in England of Commission regulation (EC) 41/2009 concerning the composition and labelling of foodstuffs suitable for people intolerant to gluten, in particular as regards the use of the terms “very low gluten” or “gluten-free”. However, the Commission decision was repealed by the EU in 2016 and replaced by EU regulation 828/2014. As such, the regulations that are proposed to be revoked via the schedule are, in fact, legally inoperable. With that information, I hope that the noble Baroness will not move her amendment, as it would be a retrograde step to keep on the statute book laws that are, in fact, legally inoperable.
Amendment 64ZA (to Amendment 64)
Lord Callanan (Con)
My Lords, I thank the House for yet another fascinating debate, only a small part of which had anything to do with the amendments we were discussing.
I will make an observation before we get into debating the amendments. I have had the privilege of being in government since 2017—for six years in three different departments. I have worked with some excellent officials, who have provided me with nothing but unstinting support. As an example, we tabled this schedule late last week—in response, I might say, to concerns expressed in this House, in an attempt by me, as the Minister, and the Government to allay the concerns that many in this House had expressed about legislation being repealed by accident. That was never our intention. It would never have happened. These regulations would have been revoked anyway but we thought it would be helpful and for the benefit of the House to set them out.
A number of Members then asked for further details about the individual regulations. Officials across government, in the Bill team and elsewhere, worked tirelessly all weekend to get the explainer to this schedule done so as to answer the concerns of Members. They worked very hard and are a credit to the Civil Service. Let me be clear, the responsibility lies with Ministers. Civil servants produced the advice, but I approved the revocation schedule for my department, DESNZ—the Department for Energy Security and Net Zero. Other Ministers approved it in their departments. Responsibility is clearly at a political level, and I will have nothing said against the Civil Service. Certainly, the Bill team worked incredibly hard all weekend, as they have done throughout the production of this Bill.
I turn to the amendments under discussion. As I said, we published the explainer to give an extensive line-by-line explanation that provides a clear justification, for the benefit of Members, for each entry on that schedule. I outlined the rationale for including the regulations flagged up by the noble Baroness, Lady Hayman of Ullock, in my opening speech. I hope that she does not want me to repeat those points on the national air pollution control plan and the national emissions ceiling directive, which are no longer in force. These depend on one another. The current format of the NAPCP is long, complicated, resource-intensive and duplicative. Removal of these particular regulations will allow us to move away from the overly burdensome system that we inherited.
Similarly, in my opener, I explained why Amendment 64ZA, from the noble Baroness, Lady Bakewell, is also duplicative, given other active environmental impact assessment regulations. No environmental impact assessment regulations have been made under those particular regulations since 2003. It is no longer necessary to have this on our statute book.
On Amendment 64ZB, I spoke to the specifics of the food-labelling regulations referenced, but I reassure the noble Baroness, Lady Brinton, that the laws to be revoked within the FSA’s remit have generally been superseded by new legislation and no longer need to remain on the statute book. Even the EU has revoked the regulations. Some have already had their operative provisions revoked, and others exist to amend or enforce legislation that has itself already been revoked.
The noble Baroness also raised enforcement. We provided additional details to her by email, but, as she knows, Commission Implementing Regulation (EU) 828/2014 laid down harmonised requirements for the provision of information to consumers on the absence or reduced presence of gluten in food, by setting out the conditions under which foods may be labelled “gluten-free” or “very low gluten”. That particular regulation remains in force and will be preserved as part of the retained EU law process. Sufficient powers are already in place under general food law to enforce the definitions. The chair of the Food Standards Agency wrote to us last week to confirm this position and to reinforce that removing them will help to make the body of law on food safety and standards clearer, while being entirely consistent with the principles agreed by the FSA board.
Baroness Brinton (LD)
I am grateful for the Minister’s response. I forwarded to him and his officials the response that I received from both the FSA and Coeliac UK, which said that this was a temporary arrangement, until 828/2014 could be introduced as a regulation under UK legislation; in other words, it is still needed. So I repeat my question: the Government consulted in 2016, and it is now seven years on, so when will that regulation be shown to the House?
Lord Callanan (Con)
I will pass the noble Baroness’s comments on to Defra, which will write to her again, but she has already received replies to her concerns in emails and she has spoken to Bill team officials about this. As I said, the FSA has said that it is entirely happy that this regulation should be revoked.
Lord Kerr of Kinlochard (CB)
I wonder whether I can help the Minister. I support what he said today, and I congratulate him on how he started and what he said about the Civil Service. But I wonder whether he might want to think, before Third Reading, about the addition of an emergency brake. I share the worries of the noble and learned Lord, Lord Hope: supposing it turns out that something is needed and that, before the deadline—before they disappear—a real case is established, could the Government not give themselves the power, by statutory instrument, to leave a particular regulation off the schedule, or to amend the schedule by statutory instrument before the deadline, simply to remove a regulation that it turns out is there in error? I do not ask for an instant reaction, but perhaps the Minister might like to think about this before Third Reading.
Lord Callanan (Con)
We are on Report. We do not need to wait until the next stage; I can tell the noble Lord now that there is a power in the amendments to allow exactly that. He does not need to have any further concerns about it.
In response to the noble Baroness, Lady Jones, I say that the UK remains committed to international agreements on air pollution, to which we are an independent signatory. We set new, legally binding targets under the Environment Act and the environmental improvement plan to halt and to reverse nature’s decline. The stretching targets mean that any reform to retained EU law must deliver positive environmental outcomes, and nothing in this schedule alters those commitments. I hope that reassures the noble Baroness.
In response to the noble Lord, Lord Fox, and his famous salt mine example, I am sorry to tell him that he is wrong. The National Archives found its pieces of retained EU law in its EU legislation database, which is now online. The noble Lord might want to consult the internet next time, rather than crawling down his salt mine. One of my officials said that she would have loved to have gone down a salt mine—it would have been a very interesting experience—but she did not need to.
Lord Callanan (Con)
I can absolutely assure him: she would have been delighted to go down a salt mine. I will not name her, but she messaged me to say that she was very keen to do so. Perhaps the noble Lord would want to arrange it for her.
The noble Lord also mentioned several regulations which are good examples of EU-inherited provisions that we may no longer need. He may not realise it, but some regulations perform multiple functions—we want to revoke some and to keep or reform others. To update and improve the regulations, we of course need to keep them for now, so that we can make those changes.
I had a feeling that the noble Lord might ask me about the famous reindeer regulation. Indeed, Regulation 1308/2013 of the European Parliament and of the Council includes provisions on reindeer, which we want to revoke because, the last time I looked, there were not many in the United Kingdom for which we need to have responsibility—perhaps even the noble Lord could agree with that. But there are other aspects of the regulation that we want to keep; therefore, in due course, there will be a reform programme which will alter that regulation. Of course, the House will get to see that through a statutory instrument at the time. I have no doubt that the noble Lord will want to engage with the Defra Minister in a meaningful debate on how important it is for the Liberal Democrats to preserve the preservation of reindeer in Lapland.
Finally, I turn to the issue of interpretative effects. My noble friend Lady McIntosh asked again for clarity on the Government’s intention. I assure her that the Government’s intentions have not changed in this regard. As she will be aware, the House agreed to Amendment 15 in the name of the noble Lord, Lord Anderson, on Monday, which seeks to replace the sunset of Section 4 of the EU withdrawal Act at the end of each year with a requirement for the Secretary of State to make a statement on the Section 4 rights and obligations which will be sunsetted at the end of this year. The House can be assured that the Government will address that.
Clauses 5 and 6, which relate to the ending of the principle of supremacy, including the principle of consistent interpretation or indirect effect and ending the application of general principles of EU law, will stand part of the Bill, as agreed by the House.
Baroness Hayman of Ullock (Lab)
Before the noble Lord sits down, I remind him that I asked a number of questions about areas other than air pollution—for example, on flooding. I wonder if the Minister could look through Hansard and write to me with a response to those questions before we reach Third Reading.
Baroness Bakewell of Hardington Mandeville (LD)
I thank the Minister for his response and the noble Baroness, Lady Hayman of Ullock, for her support. I thank all noble Lords who took part in this very lively debate, particularly the noble and learned Lord, Lord Hope, whose concerns I share completely.
In the time available, it has been impossible for most of us to go into detail on the schedule to the extent that my noble friend Lady Brinton did, and I commend her for her efforts in that respect. The Minister will have realised from the debate that there is concern across the House at the lack of opportunity to scrutinise these regulations. I do not share the comments of the noble Baroness, Lady Foster of Oxton, that this is all the fault of the Civil Service.
The Civil Service is under pressure, and occasionally mistakes do occur, but the dire situation we are in now is not its fault: it is the fault of the way in which the Government have gone about this piece of legislation, and I admire the Minister for his acceptance of that responsibility. The number of Defra’s instruments in the Marshalled List before us is overwhelming. I thank my noble friend Lord Fox for his very stirring summing up, which I cannot hope to match. The Minister set out his case at the start of the debate, and it is regrettable that he is not prepared to move on these issues. In the interests of time, and in the face of that, I beg leave to withdraw my amendment.
Lord Callanan
Member's explanatory statement
This amendment is consequential on the Minister’s amendments at page 24, line 14.
Lord Callanan
“(e) regulations under section 20 which amend, repeal or revoke primary legislation.”Member's explanatory statement
This amendment makes procedural provision in light of the Minister’s amendment at page 22, line 9 which extends the consequential power in clause 20 to devolved authorities.
Lord Callanan
“Transitional, transitory or saving provision
19 This Part of this Schedule does not apply in relation to regulations under section 23(4).”Member’s explanatory statement
This amendment is consequential on the Minister’s amendments at page 24, line 14.
Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023
Lord Callanan Excerpts(1 year, 6 months ago)
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Lord Callanan
That the Regulations laid before the House on 17 April be approved.
Relevant document: 37th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 16 May.
COP 28
Lord Callanan Excerpts(1 year, 6 months ago)
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Baroness Boycott
To ask His Majesty’s Government what preparations they have made for COP28 and which Minister has responsibility for representing the United Kingdom at the negotiations.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, the right honourable Graham Stuart MP will be representing the United Kingdom as the Minister responsible for the UN and CCC negotiations at COP 28. Following the UK’s COP 26 presidency, we of course continue to work with countries around the world to ensure that commitments made in the Glasgow climate pact are turned into action. We want to support the agenda of the incoming UAE presidency and drive an ambitious outcome for COP 28 to keep 1.5 degrees within reach.
Baroness Boycott (CB)
I thank the Minister for that Answer, and of course we all welcome Minister Stuart, but the fact that he is not a Cabinet Member raises some alarms as to quite how seriously we are taking this incredibly important conference that is coming up later in the year. Can the Minister provide clarity on when the UK will formally respond to the global stocktake of progress towards our nationally determined contributions? They are due in June but the CCC has noted that we are behind on both adaptation and mitigation.
Lord Callanan (Con)
I disagree. Graham Stuart is a very senior Minister who is committed to this agenda, and he has already taken part in a number of the ministerial negotiations. There is a cross-government group of Ministers chaired by the Chancellor of the Duchy of Lancaster meeting to co-ordinate the Government’s response.
Lord McColl of Dulwich (Con)
My Lords, are the Government aware of President Macron’s recent plea for a pause in EU environmental regulations in a push to reindustrialise France? Do the Government agree that we ought to consider that, especially in view of the fact that an increasing number of countries are profoundly disturbed about the cost of trying to limit global warming?
Lord Callanan (Con)
I had not seen President Macron’s intervention. Happily, what France and the EU do has nothing to do with us any more. They can have their own negotiations. We are just getting on with the job.
Lord Teverson (LD)
I agree with the noble Baroness that it is a great disappointment that we do not have a Secretary of State going to the Gulf for COP 28. Will the UK still be chairing the Powering Past Coal Alliance that it has led and chaired in the past? If so, will it therefore cancel its coal mine intentions in Cumbria, here in the UK?
Lord Callanan (Con)
I am not going to get into the debate about Minister Stuart. He does an excellent job and is well respected across the international community for his work, building on the work that we did at COP 26. We are committed to the Powering Past Coal Alliance. I think the noble Lord is being slightly disingenuous; he knows that the coal mine in Cumbria is nothing to do with power generation.
Lord Watts (Lab)
Do noble Lords share my concern that the Minister has just said that what France is doing does not concern him? Does he not understand that, if we are to deal with climate change, we all need to work together?
Lord Callanan (Con)
I think I said that what negotiations go on between France and the EU are not our concern any more because we are not a member of the EU. Of course we work collaboratively with many countries across the world, not just in the EU. This is a worldwide problem and we need to negotiate on a worldwide basis, which of course we do. Carbon emissions do not respect international borders.
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register. Since 2008 developing countries’ debt has doubled, and many of the countries most at risk from catastrophic climate change are actually paying more in debt repayment than they are able to spend on climate adaptation. At COP 28, will the UK be talking with international finance institutions about issues such as debt swap, which could address this problem?
Lord Callanan (Con)
The noble Baroness makes an important point, although it is slightly off the topic of the COP 28 agenda. We are incredibly proud of the massive contribution of £11.6 billion that this Government are making towards international climate finance, helping those very countries. The wider issue of debt relief is also important and will be taken forward by international development colleagues.
Lord Lennie (Lab)
My Lords, the Government have already set out some of their priorities for COP 28, one of which is to actively follow up on the phase-down of coal and the phase-out of all fossil fuels. The recent words of COP 28 president Sultan Al Jaber have been widely interpreted as meaning using carbon capture and storage to capture CO2 emissions and not completely phase out fossil fuels. What consideration have the Government given to these remarks and what steps have been taken to address them?
Lord Callanan (Con)
The noble Lord makes an important point, citing the chairman of COP. The reality is that there will still be a requirement for fossil fuels in the years to come. There will still be a requirement in the UK, which is why we have an ambitious programme —we are spending £20 billion on carbon capture usage and storage. That still enables emissions to take place but of course they will be captured and stored back underground.
Lord Howell of Guildford (Con)
Regardless of the status of whoever represents us at COP 28, will the Minister make sure that the Government understand and explain to the public that while we are getting on very well in decarbonising the electric power sector, that is only one-fifth of our total energy usage? Therefore, we are only still in the foothills of trying to climb the net-zero peak target, which requires massive expansion of both nuclear power—preferably small nuclear power—and wind power on a scale not yet contemplated and not yet being invested for.
Lord Callanan (Con)
My noble friend of course knows this subject very well from his time as Energy Minister and makes an important point. We already have invested massively in renewables. We have the biggest wind sector in Europe by far. We have the first, second and third-largest wind farms in Europe, so we are massively expanding our renewables sector. It makes sense because particularly wind power and solar power are cheap compared to fossil fuel generation, but renewables are intermittent, which is why we will also need our nuclear generation. He draws attention to the scale of the problem we face.
Baroness Sheehan (LD)
My Lords, I ask the Minister whether our Government are fully behind the COP 28 declaration to phase out fossil fuels, something that we tried to do at COP 27—not successfully. I assume the answer to that question is yes so, to help realise that aim, will the Government commit to the UK joining the fossil fuel non-proliferation treaty?
Lord Callanan (Con)
We are committed to phasing out fossil fuels and I outlined in a previous answer the progress we are making. But it is a transition: we have a requirement for fossil fuels during that transition period and have had exchanges about that before. I do not know the details of the declaration that the noble Baroness refers to, but I will certainly have a look at it.
Lord Hamilton of Epsom (Con)
My noble friend made reference to our co-operation with other countries. Do they include China and India, which continue to build coal-fired power stations and make the attainment of net zero pretty unlikely?
Lord Callanan (Con)
My noble friend makes an important point. We continue to liaise with and talk to those countries, as we do many others. The situation is complicated. While it is true that China continues to expand its coal-fired generation, it has also massively increased use of renewables. In fact, it has the largest offshore wind sector in the world now; it took over our lead on that.
Lord Birt (CB)
My Lords, following the contribution of the noble Lord, Lord Howell, I would be the first to recognise that the route to net zero is fraught with challenge and difficulty. But will the Government publish a considered integrated assessment of the optimum route forward for the UK and a detailed plan—which we do not have at the moment—of where we go over the next five to 10 years?
Lord Callanan (Con)
I am sorry to disagree, but we do have detailed plans on where we are going. We have laid them out in our building strategy and in our net-zero plan. Only just before the Recess we published our Powering Up Britain plan, outlining exactly the kind of details that the noble Lord referred to.
Lord Razzall (LD)
My Lords, do the Government have any view on the impact on COP 28 of the invitation for President Assad to attend?
Lord Callanan (Con)
I saw that the COP 28 presidency had invited Assad and all world leaders. It is a UN body, so of course we do not control who gets invited or who chairs it. Clearly, we deplore the invitation of such an appalling man to this event, but it is not something for which we are responsible.
Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023
Lord Callanan Excerpts(1 year, 6 months ago)
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Lord Callanan
That the Grand Committee do consider the Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023.
Relevant documents: 37th Report from the Secondary Legislation Scrutiny Committee and 36th Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument)
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, this instrument was laid on 17 April 2023 and debated yesterday in the other place. Its purpose is to ensure that the financial benefits from applications to the non-domestic alternative fuel payment scheme are passed through to end consumers. I thank the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee for their consideration of and comments on the regulations.
In response to the unprecedented rise in energy prices resulting from the Ukraine war, we have delivered critical support to households, businesses and other non-domestic consumers. Moving at considerable pace, the Government brought forward emergency legislation on energy support last year, paving the way for financial support to be delivered rapidly across the entire United Kingdom. The non-domestic alternative fuel payment scheme serves a crucial purpose in ensuring that businesses and organisations which are not on the gas grid and instead rely on alternative fuels for heating are not left behind and receive comparable support to users which are on the gas grid. Businesses, organisations and other non-domestic customers that use alternative fuel are receiving £150. These payments were disbursed through electricity suppliers, in most cases as a credit into the electricity supply accounts registered at qualifying properties. The vast majority of customers entitled to a payment will have already seen this credited to their bills.
We are providing the additional top-up payment to businesses and organisations consuming a very high volume of kerosene heating oil. An application service was opened on 20 March so that eligible non-domestic customers could claim this additional payment. We also provided an application process for businesses and organisations to apply for the basic £150 payment in the limited circumstances where this would not have already been received through electricity suppliers—for example, for alternative fuel users who do not have an electricity supplier and therefore did not receive a payment through this route.
This instrument plays an important role in making sure that support reaches those who need it. We have already brought forward regulations with respect to the main part of the scheme: the £150 payments delivered through electricity suppliers. This instrument complements those earlier regulations and extends that principle of pass-through to payments made in relation to the application process that commenced on 20 March.
I appreciate that some noble Lords are already familiar with the purpose of pass-through requirements, as we have brought forward several similar instruments before, not least the previous instrument in relation to this scheme. For those who may not be so familiar, let me explain what they do.
This instrument makes it mandatory for intermediaries to pass the financial benefit of the scheme on to end- users. It takes the same approach as the previous instrument and those relating to other price support mechanisms such as the energy bills support scheme and the energy bill relief scheme. That is needed because some payments will necessarily be made to intermediaries such as commercial landlords rather than the end-users, who ultimately bear the brunt of inflated energy bills. Where support is provided to an intermediary, we need to make sure that it can be appropriately passed on to the end-user.
Perhaps it would be appropriate to clarify what we mean by “end-user”. In the case of the non-domestic alternative fuel payment, an end-user is an individual, business or organisation which consumes energy or energy products and pays for that consumption indirectly through an intermediary. An example would be a tenant business paying for its energy usage through a service charge or all-inclusive rent.
As with the other energy schemes, this instrument requires support to be passed on in a just and reasonable way. The Secondary Legislation Scrutiny Committee has previously asked about the term “just and reasonable”, so let me clarify what these regulations are working to achieve. The regulations have been drafted in this way to account for the many kinds of relationships between an intermediary and an end-user. If the Government took a narrow definition of “just and reasonable”, there is the risk of inadvertently excluding some intermediaries from the pass-through requirements. This also accommodates scenarios where intermediaries have multiple end-users to pass the support on to. The regulations also make it clear when and how intermediaries should communicate with end-users, regarding the benefit being passed on.
I now turn to enforcement. The approach in this instrument is consistent with other energy schemes. If an intermediary does not pass on the benefit to an end-user who is entitled to it, that end-user will be able to pursue recovery of the benefit debt through civil proceedings. Should a court rule in the end-user’s favour, they would be entitled to the payment plus interest. The interest is set at 2% above the Bank of England’s base rate.
The regulations also require intermediaries to provide information to end-users. For example, intermediaries must inform end-users of the amount of scheme benefit that has been received, the amount that will be passed on and the remedies available to the end-user. I thank the Joint Committee on Statutory Instruments for its comments on the enforcement of this requirement. Again, our approach is consistent with that taken in the earlier pass-through regulations for this scheme and across the other energy schemes.
With respect to that requirement to pass on information, it is important to reiterate that, in our view, there would be insufficient incentive for end-users to make use of an enforcement mechanism given the time and administrative burden involved in doing so. For that reason, the regulations do not provide a specific enforcement mechanism in relation to the obligation on intermediaries to provide information to end-users. Nevertheless, we consider that there remains value in retaining this requirement in the instrument, on the basis that we expect the vast majority of intermediaries to comply. This is aided by the Government’s publication of guidance on the GOV.UK website to ensure that requirements are clear to all parties. The guidance includes template letters to support end-users, such as tenants, that they can use to contact their landlords, should they be concerned about the application of pass-through requirements.
In conclusion, this instrument is vital to ensure that support reaches the people that it is designed to help. It is essential to the effectiveness of the non-domestic alternative fuel payment across the UK. It will ensure that intermediaries pass on the support to those who really need it, and that businesses and organisations paying for energy indirectly as tenants are properly supported at this time of high energy costs. It is with all these important reasons in mind that I commend these regulations to the Committee.
Baroness McIntosh of Pickering (Con)
My Lords, I thank my noble friend and the department for bringing this measure forward—it is deeply appreciated among businesses. Do we know what the duration of the support will be in this regard?
I take this opportunity to thank the department for bringing forward the impact assessment as part of this, because we are very quick to criticise departments when they do not include such assessments. On this occasion, however, it is very thorough and greatly appreciated. I have learned a new term—counterfactual. I am not quite sure what it means, but we are told that the option of this support is being considered against a “counterfactual of doing nothing”. I do not know whether this is yet another Americanism that has crept into the English language.
I shall just press my noble friend on one point. He has been quite clear about how the intermediaries are responsible for identifying the end-user, yet on page 4 of the 36th report, printed on 10 May by the Joint Committee on Statutory Instruments, it is clearly stated that the committee wishes to report defective drafting in Regulation 5. This refers to the fact, stated in paragraph 3.2 of the report, that there is
“no mechanism in the Regulations for enforcing these requirements. This reflects an approach adopted in previous instruments dealing with the pass-through of scheme benefits by intermediaries”.
How does my noble friend and the department respond to that charge against them?
That is the only question that I have. I wholeheartedly welcome the regulations before us this afternoon. It is extremely important that the support is given, particularly in areas such as rural areas which are off grid.
I know I said that that was the only comment that I had, but I have one last question. On the £150 going to the smaller users, does that mean that the civil action can be pursued through the small claims court, which obviously would not significantly add to their costs, if they had to bring such a claim to which my noble friend referred? I thank my noble friend and the department for bringing forward the statutory instrument before us today.
Lord Lennie (Lab)
My Lords, I thank the noble Baroness, Lady McIntosh, and the noble Lord, Lord Teverson, for their repeated comments from previous similar discussions.
This instrument provides for pass-through requirements on intermediaries in respect of non-domestic alternative fuel payments in Great Britain and Northern Ireland. The Energy Prices Act enables energy support schemes to help households and businesses with energy costs for winter 2022 and future periods. As we have heard, this scheme will provide a single £150 payment to non-domestic users of alternative fuels in Great Britain and Northern Ireland. In Great Britain, payments are made to non-domestic premises in an off-grid postcode. In Northern Ireland, payments are enabled to on and off-grid postcodes.
Intermediaries are individuals in receipt of a scheme payment who, under these regulations, should pass on the payment in a “just and reasonable” way to end users. If this is less than the full amount, the intermediaries must justify the reduction to end users. This must be made in writing within 30 days of the scheme’s benefit being provided and payment made as soon as reasonably practicable. That is all well and good so far.
However, as we have asked of previous pass-through schemes, what is the remedy if this plan is not followed? How can an end user challenge the reduction in a payment or a delay in receiving either the full or reduced payment? There is no mechanism to enforce these regulations, as the noble Lord, Lord Teverson, and the noble Baroness, Lady McIntosh, said. Of course, most intermediaries will comply with the requirements built into the scheme but that does not achieve the policy objective that requires all intermediaries to do so.
We do not oppose these regulations but they fall down because no one actually has to do anything about them to ensure full compliance. There is a theoretical remedy through the civil courts, as the noble Lord, Lord Teverson, said, but how does an end user who has not been notified that they are due a payment mount a claim for such a payment to be made? Just because the Government have made corresponding regulations for other comparable schemes does not justify doing so again here. Labour and other opposition parties have previously raised this concern about effective enforcement and the Government have batted it away—and no doubt will do so again here today. But a scheme that relies upon people acting in a just and reasonable way without the means to ensure that they will do so is not a foolproof scheme but a best-endeavours scheme. Its success cannot be measured by less than 100% effectiveness. What does the Minister say on that?
Lord Callanan (Con)
I thank my noble friend Lady McIntosh, and the noble Lords, Lord Teverson and Lord Lennie, for their comments.
This instrument is necessary to ensure the proper delivery of the non-domestic alternative fuel payment scheme by allowing support to reach those who need it. The scheme is already in place and delivering much-needed support to non-domestic consumers across the UK. The scheme supports a wide range of businesses and other non-domestic consumers that are not connected to the gas grid. As I said, it is delivering a payment of £150, thereby helping businesses and organisations that rely on alternative fuels to meet their eligible costs. Most eligible customers should have already received their £150 payment by the end of March as a credit from their electricity suppliers. Where these payments were received by an intermediary, the pass-through regulations that we previously made ensure that they passed it on to the end users in a just and reasonable way. Although a relatively small proportion of businesses and organisations are entitled to a top-up payment, these payments are also important in ensuring that those consumers are not left behind and receive support comparable to those received by consumers on the gas grid and who have benefited from other schemes.
We opened an application service for the top-up payment on 20 March, and we are processing payments as quickly as possible. In addition to the top-up payment, we provided a route for customers to apply for the basic £150 payment in the limited circumstances where it was not possible for them to receive it through an electricity supplier. These regulations ensure that in all these circumstances, where a payment is made following an application, end-users benefit from the requirement that intermediaries pass on that support in a just and reasonable way. It is a case of extending the safeguards already in place for the earlier part of the scheme to payments made following an application.
On the specific points made in the debate, the noble Baroness, Lady McIntosh, asked about the duration of the support and the latest report from the JCSI. We are providing one-off payments to eligible businesses and organisations to ensure comparable support to that received by on-grid customers who have benefited from the energy bill relief scheme, and we are in the process of issuing payments to applicants. In response to the noble Baroness’s point about the JCSI’s comments on enforcement, also raised by the noble Lord, Lord Teverson, our view remains, as the noble Lord, Lord Lennie, correctly predicted, that there is little value in establishing a formal enforcement mechanism. However, we believe that it is important to include a provision on pass-through of information, as most intermediaries will comply with this.
The noble Lord, Lord Teverson, asked how successful the existing pass-through arrangements have been. We are not aware of any significant issues in the delivery of this scheme or the pass-through arrangements. Nevertheless, the scheme remains in progress, and we will continue to keep it under review and respond to any issues as they arise. As the scheme is still in progress, we are not yet in a position to say precisely how many businesses will benefit, but we believe that around 400,000 end-users will receive some level of payment under the scheme. That is a considerable amount of support.
Lord Teverson (LD)
I am grateful to the Minister for that. To clarify, is that the number of businesses that will benefit from this pass-through, as opposed to the scheme altogether?
Lord Lennie (Lab)
Is that the payment to intermediaries, who are expected to pass it on, or is it the payment received by end-users?
Lord Callanan (Con)
It would be the end-users, irrespective of whether they received it directly or via an intermediary.
As I said, we have published extensive guidance for both the intermediary and the end-user to ensure that they know their obligations and entitlements. Although we are mindful of the comments that we have received regarding these and previous pass-through regulations, in our view it is important that the non-domestic alternative fuel payment is delivered consistently as one coherent scheme. As these regulations cover only a small part of a much wider scheme that is already in place, it is right that we maintain essentially the same approach followed in the previous regulations for other parts of the scheme. Nevertheless, we will continue to update and publicise the guidance on GOV.UK to ensure that end-users and intermediaries understand their rights and obligations. I therefore commend these regulations to the Committee.