Energy

Alistair Carmichael Excerpts

Tuesday 7th March 2023 Commons Chamber

[Amanda Solloway]

I thank the hon. Gentleman for that question. With his permission, I will get back to him with the answer.

The pass-through requirement regulations are an important part of the support package and of ensuring that support reaches those who need it. The alternative fuel payment and non-domestic alternative fuel payment pass-through schemes set out in the regulations take the same approach as other energy schemes, particularly the energy bills support scheme and the energy bill relief scheme. They make it mandatory for intermediaries to pass the financial benefit of the schemes through to end users, which is necessary because that benefit is being delivered through electricity suppliers. In some cases, a supplier will have a contract with an intermediary such as a landlord or a heat network rather than with the end user, so we need to ensure that the support that it provides to the intermediary is passed on to the end user in a fair way.

Let me clarify what I mean by “end user”. In the case of both the alternative fuel payment and the non-domestic alternative fuel payment, an end user is an individual who consumes energy and pays for its usage through an intermediary such as a landlord. We are talking about tenants of different types—they could be domestic tenants, businesses or any kind of organisation.

Like other energy schemes, the schemes set out in the regulations require that support be passed on in a “just and reasonable” way. The regulations have been drafted in that way to account for the many kinds of relationship between an intermediary and an end user. If we used a narrow definition of “just and reasonable”, we could run the risk of inadvertently excluding some intermediaries from the pass-through requirements.

The regulations also accommodate scenarios in which there are multiple end users to whom intermediaries pass on support. They make it clear when and how intermediaries should communicate with end users regarding the benefit that is being passed on.

Our approach to enforcement is consistent with the approach taken in other energy schemes, particularly the energy bills support scheme in Great Britain. If an intermediary does not pass on the benefit to a user who is entitled to it, that user will be able to pursue recovery of the benefit debt through civil proceedings. Should a court rule in the end user’s favour, the end user will be entitled to the payment plus interest at 2% above the Bank of England base rate.

The Government have published guidance on gov.uk to ensure that the requirements are clear to all parties. If necessary, there are also template letters that tenants can use to contact their landlords if they are concerned about their energy bills. The Government are working with a wide range of stakeholders to ensure that the pass-through regulations work for everybody in scope, including vulnerable people and vulnerable groups.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

It is apparent from my constituency casework that there are people who have already received the payment through their energy company, but who probably should not have. I ask the Minister to confirm on the Floor of the House what she has told me in correspondence:

“Government will not require customers to repay an Alternative Fuel Payment which they have received, even if they use electricity to heat their homes.”

[Amanda Solloway]

As the right hon. Gentleman will know, I am very new in post, so I will check that point before I respond, if I may.

The regulations are vital to ensuring that support reaches the people it is designed to help. They are essential to the effectiveness of the alternative fuel payment in GB and the non-domestic alternative fuel payment across the United Kingdom. They will ensure that intermediaries pass on the support to those who really need it: the households and non-domestic energy customers most vulnerable to high energy costs. With all those important reasons in mind, I commend the regulations to the House.

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[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I declare an interest, as my home is off grid. We are heated by an oil-based central heating system, and I have received the £200 alternative fuel payment from my energy company, Octopus Energy.

The Liberal Democrats support this scheme but, like others, we have very serious concerns about the way in which it has been constructed and implemented. I have liaised with the Minister through correspondence and at Business questions last week on the fact that a number of people whose homes are heated entirely by electricity should not, on my reading of the regulations, have been given the alternative fuel payment, but on the basis of the modelling used by the Department, they have been given it. Others in an identical situation will now have to make an application through the portal that went live yesterday. If the Government are to implement their own regulations, those applications will be refused. That will leave us in the manifestly unfair situation whereby, for two households in exactly the same situation, one will be in receipt of the £200 payment and the other will not. The Minister has already told me in correspondence that there are no plans to claw back payments that have been made. That being the case, what will be the remedy for those whose application through the portal is refused?

I look at the information that has been put into the public domain on the way in which tokens for people on prepayment meters can be paid out, and I look at the information that has been given to me by my own energy company, and they both say that the tokens can be redeemed through PayPoint. That is true, but they can also be obtained through the Post Office. Only a handful of the outer islands in my constituency have access to PayPoint, but people can go to their local post office. The information going to the end energy user should surely reflect that.

One business in Orkney brought to my attention today the fact that it will not, apparently, receive the payment because it changed its energy supplier at the start of the year. It will not get the payment from its new energy supplier or from its former one, which, again, appears to be a fundamental unfairness.

The issue relating to district heating schemes does not affect many communities, but it very much affects Lerwick, where Shetland Heat, Energy & Power provides a district heating scheme to many local households. It appears to us that they have been excluded from the scheme. Will the Minister explain to us, either now or in correspondence, why that should be the case?

The applications that are now having to be made by those who have not received their payment automatically are to be done through the portal. So will the Minister tell us how long it will take for those people to be given a decision? In the event that they are unhappy with the decision made, what will be their appeal process? It is matter of record that there is a significant overlap between homes that are off grid and those that have poor or no internet access. A number of vulnerable elderly people just do not use internet services at all, but there appears only to be an online application process. Will the Minister explain to the House why no offline process—no paper-based process—is in place for that small number of people who remain highly vulnerable?

Finally, I turn to the issue of those who rely on solid fuel—peat, coal or logs—for their heating. It is now apparent that they will have to provide receipts. Those can go back to September, but someone who has been buying coal at their shop, perhaps in a small bag, every week since goodness knows when will not have kept their receipts. How are those people, who have incurred the expense, going to get access to this important payment? It is arbitrary to say that solid fuel bought only after September will be eligible for reimbursement. I know a lot of people who will buy solid fuel in the summer months because it is at its cheapest then. What will be done to ensure that those people, who are now being told that they should have been keeping the receipts from their weekly shopping since September, are not going to be excluded?

Will the Minister tell us how many payments have already been made? How many people will now have to make an application through the portal? How many does the Department estimate will remain off grid but will not receive a payment under this scheme?