Energy Company Obligation Schemes

Amanda Solloway Excerpts

Tuesday 27th June 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

It is a great pleasure to be serve under your chairmanship, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on securing this incredibly important debate and thank all those who have contributed. As you may know, Mr Paisley, this issue is not in my portfolio; however, I am here to represent the Government and to take away any questions that I am unable to answer today.

I welcome all Members’ contributions; they really have been incredibly helpful. I thank everyone, particularly the hon. Member for Ceredigion, for the suggestions they made throughout the debate. One of the things that we really need to apply within all of this activity is common sense, and a lot of the suggestions that I have heard today have been based on common sense.

Although they are not relevant to this debate, I will also talk about the energy costs that really play on my mind as the Minister with responsibility for consumers and affordability. Clearly, there are many schemes that I could go into, although, as I say, they are not relevant. I will just say what many hon. Members have already said, which is that we must encourage all consumers to make sure that they get all of their benefits. I thank the hon. Gentleman for raising that issue; as Members of Parliament, we should always encourage people to do that.

The energy company obligation is the Government’s most successful domestic energy efficiency scheme in Great Britain. It obliges larger energy suppliers to deliver bill savings for households by installing energy efficiency measures. Since it began in 2013, it has delivered 3.6 million measures in more than 2.4 million properties, which means that over 9% of British households have had an ECO measure installed. Low-income and vulnerable households will save over £19 billion on their bills over the lifetime of the measures that have been installed. As the hon. Gentleman may know, over 17% of households in his constituency have received ECO measures over the last decade.

ECO4 was introduced last year and runs until March 2026. It has continued to support low-income and vulnerable households while also increasing the focus on the least energy-efficient properties and on fuel poverty. To be eligible for it, households either have to be in receipt of means-tested benefits, live in social housing or be referred by their local authority or energy supplier. For the first time, part of the overall target has been met by upgrading the equivalent of 150,000 of the worst-performing homes, with those living in homes with energy performance certificate ratings of E, F or G the most likely to be in the deepest fuel poverty. Also for the first time, we set a minimum requirement for energy efficiency improvements, depending on a home’s energy efficiency rating. This means that more of the households receiving help will be brought out of fuel poverty permanently. We estimate that at current energy prices, households benefiting from ECO4 will reduce their annual energy bills by over £600 on average.

Delivery under ECO4 commenced last April, with around 130,000 measures delivered to over 43,000 low-income households. The scheme data shows a gradual increase in delivery, and recent reporting from the supply chain indicates that delivery has continued to increase through May and June.

I am sure that the hon. Member for Ceredigion will be delighted to hear that Ceredigion continues to benefit disproportionately from ECO4; over 1% of all measures installed under ECO4 have been in his constituency. This success is partly due to the explicit incentive within the scheme to treat off-grid rural homes in Wales and Scotland, and it is also thanks to the ECO Flex provision, which allows up to 50% of the overall obligation to be met by treating homes that have been referred by a local authority or a devolved Administration. Ceredigion is one of the leaders in that part of the scheme.

Nevertheless, I assure the House that we are not complacent. We continue to monitor delivery closely, working with local authorities, energy suppliers and devolved Administrations to share best practice about ECO Flex and to remove administrative barriers where possible. Ofgem has recently republished guidance that should make the ECO Flex process easier, and, as has been mentioned, we are considering how the whole scheme can be amended. We recognise that costs have increased since we developed ECO4 and that, as the hon. Gentleman explained, meeting the minimum improvement requirement in certain homes is challenging. We are considering whether changes to the policy are desirable and analysing the potential impact of such changes. For example, we will need to examine the consequences of relaxing the minimum requirement for our fuel poverty targets, given the imperative of proofing homes to band C. Making changes to ECO4 will require a public consultation and amendments to affirmative regulations, so any changes we decide to make will be well informed by external stakeholders.

On the hon. Gentleman’s point about expanding the list of technologies, the primary legislation that enables ECO4 and GBIS limits technologies to those that reduce space heating costs. While we are open to expanding the eligible technologies in the future, that would require a change in primary powers. Beyond ECO4, and in response to persistently high energy prices, we have extended the help available through a new eco energy efficiency scheme: the Great British insulation scheme, which many Members mentioned. Previously consulted on as ECO+, it will boost support for those on the lowest incomes and the most vulnerable, and extend help to a wider pool of households who are also challenged by high energy bills.

ECO4 and the Great British insulation scheme are a major expansion of the Government’s action on energy efficiency. The predecessor ECO3 scheme was worth £640 million annually, and total ECO funding has now reached £1.3 billion per year to March 2026. We estimate that by April 2026, the GB insulation scheme will have delivered about 376,000 measures to about 300,000 households, helping households to cut heating bills by an average of £300 to £400 per year.

These schemes also create continuity for the supply chain. To further facilitate supply chain growth, the Government have increased funding for training schemes, as many Members mentioned. The Department’s £9.2 million home decarbonisation skills training competition, launched in September 2022, has awarded grant funding to 19 training providers in England to deliver subsidised training in the energy efficiency, building retrofit and low-carbon heating sectors. That training will deliver an estimated 9,000 training opportunities to the building retrofit, energy efficiency and heat pump sectors through to summer 2023. That includes accredited training to qualify standard installers and retrofit co-ordinators.

Alongside the energy efficiency upgrades we are making through the Great British insulation scheme and ECO4, the Government are investing £6.6 billion over this Parliament in clean heat and energy efficiency, reducing our reliance on fossil fuel heating. In addition, £6 billion of new Government funding will be made available from 2025 to 2028. We have heard it said that consumers are at the heart of everything we do, and I give my assurance that one of the things we are doing is reaching out to stakeholders. Hon. Members have also mentioned places such as citizens advice bureaux. Clearly it is important that we talk to people about the cost of living but also what we are doing in our ongoing support.

The Government investment I have listed, as well as specific investment in building a market for green finance, means that a range of green financing options are already available from high street lenders to owner-occupiers and private landlords. They include things such as green mortgages and additional borrowing facilities, or cashback offers to homeowners undertaking energy retrofit. Some energy suppliers also offer 0% finance for certain energy efficiency products. Improving the energy efficiency of our homes is the best long-term solution to reducing energy bills and tackling fuel poverty. ECO4 and the GB insulation scheme will support that, while also helping to protect our nation’s energy and support our net zero target.

A comparative assessment of cost assumptions for the ECO4 scheme and those set out in the Great British insulation scheme consultation has also been talked about. We are monitoring ECO4 delivery against the current cost assumptions, and we will consider changes if necessary. Changing the cost assumptions may require a change to the overall energy bill reduction target, to the estimated funding, to policy details of the scheme, or a combination of all three. Such changes will require public consultation and regulatory change.

There are many more areas that I could discuss, but I will end by thanking the hon. Member for Ceredigion again for securing this important debate. I look forward to continuing to engage with him and all ECO stakeholders to ensure that the schemes continue to help fuel-poor households, support jobs and deliver value for consumers.

Heating Rural Homes

Amanda Solloway Excerpts

Tuesday 13th June 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I thank my hon. Friend the Member for North Herefordshire (Sir Bill Wiggin) for his impassioned speech. We have heard a lot from the rural champions who are here, so it is a great pleasure to be here. I point out that the issue is not in my portfolio; however, I will take back to the Department any question that I cannot answer, and will of course respond in due course to anybody I do not manage to respond to directly tonight. This is an incredibly important debate on heating rural homes. I thank my hon. Friend for our conversation earlier, in which he explained the problem.

Decarbonising off-gas-grid properties that use fossil fuel heating is a key priority for us, as they are some of our biggest polluters. The use of oil and other high-carbon fossil fuels to heat our properties also reinforces our dependence on foreign sources of energy. The Government recognise that off-gas-grid households have been particularly exposed to high and volatile energy bills, due to the impact of rising global fossil fuel prices following Putin’s illegal invasion of Ukraine. That is why we have taken decisive action to support rural households facing higher heating costs through the winter. The energy price guarantee is currently protecting customers from increasing energy costs by limiting the amount that suppliers can charge per unit of gas or electricity used. In addition, the alternative fuel payment scheme delivered £200 to households that use alternative fuels such as heating fuel, petroleum gas or biomass, helping around 2 million off-grid households across the United Kingdom.

Going forward, the Government intend to move away from universal energy bill support and towards better targeted support for those most in need. Therefore, to keep prices down for ordinary households in the long term, we need to make sure that we are relying on sources of energy that are affordable, clean and—above all—secure.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The Minister is very gracious in giving way, and she is making a most interesting speech. Could I recommend to her something that would be helpful, namely whisky? In the rural community of Wick, in Caithness in my constituency, we have a distillery called Old Pulteney—it is an excellent whisky, but that is not the subject of this intervention. Old Pulteney helps to heat at least 200 houses in Wick, as well as Caithness General Hospital. It is an imaginative solution, so I suggest that the Minister looks at how that is done, takes herself on a tour of other distilleries that are not doing the same, and samples their wares for inner warmth, but also sees how they can contribute to outer warmth.

[Amanda Solloway]

I confess to being a whisky drinker, so I feel a visit coming on, but that might not be allowed. Of course, I will look into that.

Transitioning rural, off-grid properties to low-carbon heat will help to move us off imported oil and build energy independence; help protect consumers from high and volatile energy bills; and keep us on track for net zero. However, I want to take this opportunity to reassure my hon. Friend the Member for North Herefordshire that we recognise the challenges involved, which he has described so eloquently. Decarbonising rural, off-grid properties in a way that is fair, affordable and smooth for consumers will require a range of different technologies and policy approaches.

While we expect that most off-grid properties will ultimately switch to heat pumps, affordability is a key challenge that we need to address, particularly while the cost of installing a heat pump remains higher than the cost of replacing an oil system. That is why we are taking a range of steps to grow the heat pump market to 600,000 installations a year by 2028, and to make installing a heat pump a more attractive and affordable choice for heating a home. I acknowledge the challenge of building the skills that installers will need; I will take that point away and—with your permission, Madam Deputy Speaker—come back at a later date in a different manner. The steps we are taking include providing support through schemes such as the boiler upgrade scheme and home upgrade grant. We want to make sure that people make green choices.

As we take action, we want to ensure that the economic benefits of the transition to net zero are retained in the United Kingdom, which will create new, highly skilled jobs in the low-carbon economy. That is why we are investing £30 million in the heat pump investment accelerator, which will bring forward investment in heat pump supply chains and aim to ensure that at least 300,000 heat pumps are manufactured annually here in the UK by the end of the decade. I also take this opportunity to reassure my hon. Friend that no one will be required to install an unsuitable technology in their home or business. Heat pumps will not work everywhere—some off-grid properties are simply too poorly insulated or have certain characteristics that would make installing the technology challenging. We are therefore looking closely at the potential role of low-carbon heating solutions, such as high-temperature heat pumps, hybrid heat pumps, solid biomass or renewable liquid fuels. They could play a part in the low-carbon heating mix, particularly where heat pumps cannot be used. However, sustainable biomass is a limited resource, and we need to take care to prioritise its use in sectors that offer the greatest opportunity to reduce emissions and where there are the fewest alternative options to decarbonise.

There were some comments on the EPC, which is under a different Department, but I will take that away. However, I thoroughly believe we should always be looking at ways to improve methodology, and I am happy to have further conversations on that, if that is helpful. The forthcoming biomass strategy will review the amount of sustainable biomass available in the United Kingdom and consider how the resource could be best utilised across the economy to help achieve the Government’s net zero and wider environmental commitments. My hon. Friend also mentioned the consultation on the boiler ban. The Government have a commitment to transition to clean heat for the future. My hon. Friend asked me about a date, which I am unable to give at this stage, but I will look into that consultation and get back to him as soon as I can.

We will continue to work with industry stakeholders to build further evidence that will allow us to evaluate what roles these fuels may play in heat, especially where heat pumps cannot be used. Earlier this week, I visited Certas Energy, the UK’s largest distributor of heating oil. I thank it for supplying off-grid customers this winter. I also learned about its plans to transition to low-carbon renewable liquid fuels, and I will take away lots of points from that visit. Through the support we are providing, I assure my hon. Friend that we are acting and will continue to act to ensure that the transition to clean heat is smooth, fair and affordable for rural off-grid households and businesses.

[Greg Smith]

rose—

Energy Prices Act 2022: Expenditure on Energy Schemes

Amanda Solloway Excerpts

Thursday 8th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I am tabling this statement to update hon. Members under the Energy Prices Act 2022, in line with the requirement under the Act for quarterly reporting to Parliament on expenditure incurred under it.

This is the second quarterly report on energy scheme expenditure under section 14 of the Act and covers the period from 1 January to 31 March 2023.

Energy prices are volatile, and changes will affect the outturn cost of the schemes.

The Government have prioritised support for those most in need, while ensuring we act in a fiscally responsible way. The Government have covered nearly half a typical household’s energy bill through the energy price guarantee and energy bills support scheme since October—with a typical household saving around £1,500. The energy price guarantee scheme will continue at £2,500 to the end of June.

Reaching Net Zero: Local Government Role

Amanda Solloway Excerpts

Monday 5th June 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I welcome the opportunity to debate this incredibly important issue. I thank all hon. Members from across the House for their contributions, which have informed a very interesting and, at times, lively discussion. I also thank the hon. Member for Bath (Wera Hobhouse) for bringing this important topic to the House.

The UK’s 2050 net zero target is a Government priority. The transition provides huge opportunities for jobs, investment, innovation and exports. The UK is already leading the world in tackling climate change. Between 1990 and 2021, we cut emissions by 48% while growing our economy by 65%, decarbonising faster than any other G7 country.

Our local areas will play a crucial role in delivering net zero. We agree that local authorities have great scope to influence carbon emission reduction and many have strong ambitions in that area. We can consider the transition a success only if its benefits are felt across the UK. We know that we need local authorities to drive action across a range of areas such as planning, energy, housing and transport.

[Caroline Lucas]

On the issue of planning, as an example, does the Minister accept that the Government need to give powers to local authorities as well? There are examples of local authorities trying to implement green planning policies, but they find that their policies are being thrown out by local planning inspectors because there is not a net zero obligation at the heart of our planning process. Does she agree that that is something the Government could do to facilitate the action of many councils around the country?

[Amanda Solloway]

I will come on to talk in a bit more detail about all the Government’s plans, but we are confident that we are doing all we can to achieve our net zero goals.

Local authorities are well placed to align net zero work with local opportunities. There can be significant economic advantages for local areas, attracting private sector net zero investment and building local supply chains. They currently have a lot of flexibility when they take action on net zero. My Government are keen to ensure local authorities preserve that flexibility because, as has been noted, each region and community may require tailored approaches to reach net zero. So we do not believe that a new general statutory requirement on local authorities to meet net zero is needed. There is already a high level of local commitment in the sector and our local government colleagues have told us that a new statutory duty is not something they want.

The Government are already working closely with local government to help deliver net zero. In the 2021 net zero strategy and net zero growth plan from this year, we set out how local areas can take action on a wide range of policies, including planning, transport and energy, as part of our overall strategy to reach the UK’s 2050 net zero target. More detail on how we will meet net zero by working with local partners is set out in the relevant sectoral strategies, such as the transport decarbonisation plan from 2021. That covers, for example, how emissions from different forms of public transport will be reduced. The creation of the Department for Energy Security and Net Zero helps to drive the overall delivery of net zero across Government. The Department’s officials work with counterparts across Government to co-ordinate action, working particularly closely with the Cabinet Office and His Majesty’s Treasury. That ensures net zero is prioritised in Government.

On working closely with local government on net zero, my colleague Lord Callanan, the Minister for energy efficiency, co-chairs, with the Local Government Association, the ministerial local net zero forum. It met in February for the first time. Alongside that, there is an officials’ local net zero forum, which has met four times to date. Both forums bring together national Government and local government to discuss key policy and delivery options on net zero. The Department funds five regional local net zero hubs to help local authorities develop net zero projects, focusing on attracting commercial investment. The hubs have helped to develop innovative tools and resources for local authorities, including Net Zero Go, an online platform supporting clean energy projects, and SCATTER—setting city area targets and trajectories for emissions reduction—which is a tool to help local authorities standardise their greenhouse gas reporting. Tools of this kind are supported by a wide range of guidance from Government Departments and other sources. I recognise the importance of co-ordinated action across Departments, but given the range of actions recently undertaken in this area, the Government do not think a net zero delivery authority is necessary.

The Government have provided a great deal of funding for local government to reach net zero. Through core settlement growth funding, such as the shared prosperity fund and grant funding from my Department and others, local authorities can meet net zero goals flexibly, in a way that best meets their needs. We have committed to explore simplifying local net zero funding, where that provides the best results for net zero. We will continue that work. One approach we are testing is using devolution deals in England to pilot new approaches. We have announced wide-ranging devolution deals with the Greater Manchester Combined Authority and the West Midlands Combined Authority. They include first-of-their-kind pilots to simplify retrofit funding from 2025. We also established the UK Infrastructure Bank, which has a lending facility of £4 billion for local authorities at preferential rates and a technical advisory service.

Communities also play a strong part in supporting our transition to net zero. I am aware that in the constituency of the hon. Member for Bath, the Bath and West Community Energy Group works with local authorities in the area to support households to access funding for energy efficiency measures in their homes. Many communities work closely with local authorities to access the funding and support they need, and the local net zero hubs can help local authorities and community groups to work together.

We already work in partnership with local areas towards our net zero goals, with examples of local innovation across the United Kingdom. By working together, I am confident that we can drive green growth across the country and deliver our ambitious net zero targets.

Oral Answers to Questions

Amanda Solloway Excerpts

Tuesday 23rd May 2023 Commons Chamber

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

5. What discussions he has had with Ofgem on the potential impact of fixed-term energy contracts on the hospitality industry.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I have had several discussions with the Ofgem CEO and suppliers on businesses and hospitality businesses on high fixed contracts. I am sympathetic to those businesses, but it is a commercial matter.

[Ruth Cadbury]

The Royal Oak in Isleworth is a popular family-run pub. Last autumn it had to sign a fixed-term contract at the highest rates. When I raised this issue in March, just before the end of the energy support scheme, the Minister told me that the Government had met energy suppliers, as the Minister has just confirmed. What else are the Government doing to make sure that no more pubs or other successful and thriving small businesses go under because of crippling energy costs?

[Amanda Solloway]

This Government have been incredibly helpful to all businesses, particularly the hospitality sector. As I mentioned, I am sympathetic to those businesses, but this is a commercial matter. Let me reassure the hon. Lady that I have met stakeholders and suppliers. Today I have written to them again to reiterate that they must be mindful of fixed-term contracts.

[Derek Thomas (St Ives) (Con)]

No hotel, pub or guesthouse can do its job without the support of the laundry sector, which is feeling the pain of high energy bills, often fixed at the wrong time. I hear what the Minister says about the commercial element, but will she arrange a meeting with the energy efficiency unit and the laundry sector to see what can be done to reduce demand and get better deals from energy suppliers?

[Amanda Solloway]

I thank my hon. Friend for that question. Of course, I am always delighted to organise those meetings.

[Helen Morgan (North Shropshire) (LD)]

7. Whether he is taking steps to increase grid capacity.

--- Later in debate ---

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

18. What steps his Department is taking to support small and medium-sized enterprises on fixed-term energy contracts.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

The energy bill discount scheme will continue to provide a discount to eligible non-domestic customers, including those on fixed-term contracts. I met energy suppliers in March to reiterate my expectation that they must do all they can to support businesses on the highest-priced contracts.

[Alison Thewliss]

The Federation of Small Businesses has found that more than one in 10 small firms fixed their energy prices during the market peak last year, meaning that now 93,000 small businesses across these islands could be forced to downsize, restructure or close their doors altogether. Will the Minister support the FSB’s calls for action on this? It is unacceptable that businesses in Glasgow Central and beyond have been marooned on devastatingly high energy contracts.

[Amanda Solloway]

One of the things this Government are committed to do is helping small businesses. Both the Secretary of State and I have met the FSB to discuss this matter and to ensure that we are doing the best thing that we can for those on fixed-term contracts.

[Martyn Day]

That was rather a non-answer. Since the downgrading of the energy bill relief scheme to the mair austere energy bill discount scheme, firms, many of them in my constituency, are paying three to four times the amount they were for energy under the previous scheme. If the Minister does not believe the figures she has just heard from the FSB, how many firms does she think will go to the wall as a result of these higher energy costs?

[Amanda Solloway]

This Government remain committed to supporting all small and medium businesses, and the whole business sector. We did the relief scheme and we now have the discount scheme as well. We are also implementing a high energy-intensive scheme. Both the Secretary of State and I are urging suppliers to have a look at these fixed rates and making sure that we can find a reasonable way forward.

[Dr Matthew Offord (Hendon) (Con)]

15. What assessment he has made with Cabinet colleagues of the potential barriers for local authorities in achieving net zero goals.

--- Later in debate ---

[Kate Hollern (Blackburn) (Lab)]

20. What recent estimate his Department has made of the number of families in fuel poverty.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

In 2022 there were an estimated 3.26 million households—13.4%—in fuel poverty in England. The Government recognise how difficult the increase in fuel bills, caused by Putin’s war in Ukraine, has been for households across the country.

[Sarah Owen]

Recent figures show that energy companies such as Shell make £61,000 a minute. Meanwhile, there are families—13,255 families in Luton—living in fuel poverty. I also have pensioners in Luton suffering from chronic health conditions who are risking their health because they cannot afford to put on the heating. The Minister could take action on fuel prices by extending the windfall tax and closing loopholes, so why has she not done so? We do not want any more flim-flam answers. The public are not buying it, the people in Luton North are not buying it, and I am not buying it.

[Amanda Solloway]

The Government have applied a levy on these energy companies, but the really important thing is the work that we have been doing with those households. We have been giving a lot of support and ensuring that we do the very best for all of those people. In addition, on Thursday 31 May we are launching our “Claim your energy voucher” day, and it is really important that all those on prepayment meters do claim their vouchers.

[Kate Hollern]

The Minister just mentioned the work that the Government have been doing, but the Environmental Audit Committee, in its report in January, criticised the Government’s energy efficiency target as “vague” and “unspecific”, saying that they had a poor record on energy efficiency. Meanwhile, 16.6% of households in Blackburn are in fuel poverty. Is the truth not that the pace of energy efficiency under this Government is too slow, and it is driving even more families into fuel poverty?

[Amanda Solloway]

Just to reiterate, we have taken decisive action to protect customers this winter. We have paid around half a typical household’s energy bill. There are also multiple schemes in place targeted at the most in need, including the social housing decarbonisation fund, the home upgrade grant and the energy company obligation scheme.

[Jill Mortimer (Hartlepool) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Matt Western (Warwick and Leamington) (Lab)]

T2. The Minister may be aware of a company called Green Energy Together, used by authorities up and down the country who have paid significant deposits. The company was wound up yesterday, leaving thousands of people across the country, including dozens of my constituents, out of pocket. Will the Minister agree to meet me to discuss this urgent crisis, as many people face significant losses? [R]

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I thank the hon. Gentleman for bringing the matter to our attention. I would be very happy to meet him to discuss it.

[Mark Pawsey (Rugby) (Con)]

T5. There is no point reducing our emissions in the UK if we simply cause them to be produced elsewhere in the world by importing manufactured goods, often from countries where higher emissions may be embodied. A carbon border adjustment mechanism can allow for that, although here in the UK we are behind Europe, which already has a CBAM in place. What progress is being made to develop and implement a CBAM to address the risks of carbon leakage?

[Tonia Antoniazzi (Gower) (Lab)]

T3. Tinmasters, an energy-intensive business in my constituency, was told it was not eligible for the energy bills discount scheme because it fixed its existing contract before December 2021. It has since had to sign a “blend and extend” contract, as it was the only option for survival. The Minister has spoken with me, but can she tell me what her Government are doing to ensure that suppliers who offer blend and extend contracts are being fair to their customers and how the Government can support those businesses not eligible for support because of an arbitrary date?

[Amanda Solloway]

I thank the hon. Lady for the meeting we had to discuss the matter, which we are looking into. We must recognise that it is the suppliers and consumers who have entered into a contract. However, my strongest encouragement to suppliers is that they do all they can, and blend and extend is certainly one of the ways we can help on that.

[John Penrose (Weston-super-Mare) (Con)]

T7. Does the Minister agree that rewiring energy markets through REMA, the review of electricity market arrangements, is the fastest and cheapest way to cut bills by uncoupling them from gas prices? Does he therefore agree that we should speed up and that bill payers would be best served by a Government White Paper on that before the summer recess?

--- Later in debate ---

[Carol Monaghan (Glasgow North West) (SNP)]

T6. Ofgem has stated that prepayment meters should not be fitted for anybody over the age of 85. In Glasgow, life expectancy is 76. Will the Minister look at increasing the range of people who are considered vulnerable under this?

[Amanda Solloway]

The arrangements that we have for prepayment meters are incredibly important, and we are working closely with Ofgem to ensure that we tackle this issue. As always, I am happy to meet to discuss these issues.

[Peter Gibson (Darlington) (Con)]

Sainsbury’s, Morrisons and Asda are charging more for road fuel in my constituency than they are in neighbouring towns. Can my right hon. Friend explain what he is doing to help my hard-working constituents secure cheaper fuel?

--- Later in debate ---

[Mr Speaker]

That will be very jammy.

[Amanda Solloway]

I thank my right hon. Friend for that invite, and I would be delighted to go if some of the product was on offer. We are constantly looking at the help we can give. We are giving help across all industries. We are giving universal help through the discount, and we are helping energy and trade intensive industries as well. The classification exists to ensure that we do not have a bias.

[Anne McLaughlin (Glasgow North East) (SNP)]

T9. For seven long years, my SNP colleagues and I have fought for justice for victims of green deal mis-selling. A successful recent test case is now being appealed, and the resolution to this could take many more years. In the meantime, some of my constituents have died—most recently, a lovely woman by the name of May Young. We do not have to keep putting people through this; there is a political resolution. Will the Minister meet me to discuss that?

--- Later in debate ---

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

At the moment, many people receive their domestic energy on a commercial contract, either via a landlord or because they live above a shop. This Government put in protections to support them, but they have now been lifted, and those people are of course ineligible for the Ofgem energy price cap. Will the Government review this situation to ensure those residential customers are treated with the residential protections they deserve?

[Amanda Solloway]

This Government have a commitment to ensure that everybody is treated fairly, especially when it comes to the discounts and relief schemes. We have legislated to make sure that landlords pass on the payments they receive; if they do not, there is a way of redressing that by going through gov.uk.

[Wera Hobhouse (Bath) (LD)]

ChargePoint, one of the largest UK charging networks, worries that the Government’s local EV infrastructure fund will replicate the mistakes of the past, where electric charge points were put into lamp posts and bollards where people with non-electric vehicles park, therefore losing valuable electric charging. Will the Government ensure that the LEVI fund is targeted at local authority assets such as swimming pools and libraries, where people will often go, therefore increasing EV charging capacity?

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

Some 13,450 energy bills support scheme vouchers have gone unclaimed in my constituency. Given the delays that many of my constituents have experienced in obtaining those vouchers and arguing the case with their energy companies, will the Minister push back the date by which they have to be redeemed, which is currently 30 June?

[Amanda Solloway]

The hon. Member makes an incredibly important point, and gives me the opportunity to make plain that we must make sure all those vouchers are cashed in by 30 June. I encourage every single Member in this place to make sure that their constituents who are on prepayment meters and have not cashed in those vouchers do so.

Energy Bills Discount Scheme Regulations 2023 Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 Energy Bills Discount Scheme Pass-Through Requirement Regulations 2023 Energy Bills Discount Scheme Pass-Through Requirement (Heat Suppliers] Regulations 2023

Amanda Solloway Excerpts

Monday 22nd May 2023 General Committees

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I beg to move,

That the Committee has considered the Energy Bills Discount Scheme Regulations 2023 (S.I. 2023, No. 453).

[The Chair]

With this it will be convenient to consider the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 (S.I., 2023, No. 454); the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 (S.I., 2023, No. 464); the Energy Bills Discount Scheme Pass-through Requirement Regulations 2023 (S.I., 2023, No. 463); and the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 (S.I., 2023, No. 455).

[Amanda Solloway]

It is a great pleasure to serve under your Chairmanship, Mrs Latham. The regulations were laid before the House on 25 April 2023, and I will refer to them collectively as the EBDS regulations.

The Government responded decisively to the unprecedented rise in energy prices caused by Putin’s brutal invasion of Ukraine by delivering critical bill support to households, businesses and other non-domestic energy consumers. More than £7 billion of support has been delivered by the energy bill relief scheme alone. That equates to approximately £35 million a day, and it has helped many businesses to keep the lights on.

The Government’s emergency legislation paved the way for the support package to be delivered rapidly across the entire United Kingdom. The Energy Prices Act 2022 was introduced in Parliament on 12 October 2022 and provided the legislative footing needed to ensure that the Government could deliver much-needed support to UK businesses through the energy bills discount scheme.

These regulations are needed to implement and operationalise the energy bills discount scheme. That follows the energy bill relief scheme, which ended on 31 March, and it ensures continuity of support to cover energy consumed between 1 April 2023 and 31 March 2024. Although wholesale energy prices have fallen since their peak, many consumers may still be exposed to higher bills and be in need of support, and the scheme takes that into account. The purpose of the regulations is to reduce the charges for electricity and gas supplied by licensed and licence-exempt energy suppliers to eligible non-domestic customers, and to make payments to suppliers in respect of those reductions in Great Britain and Northern Ireland.

Each statutory instrument is a replacement for an earlier set of regulations that implemented the original EBRS. They 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. Without such intervention, non-domestic customers would no longer be provided with support. Instead, they would be exposed to the full impact of high wholesale market prices. In order to protect all eligible customers from excessively high energy bills, the EBDS will run for a 12-month period from 1 April 2023 to 31 March 2024.

I will now turn to the detail, starting with the Energy Bills Discount Scheme Regulations 2023.

[Dan Carden (Liverpool, Walton) (Lab)]

I want to raise an issue that has come up a number of times in my constituency. Residents in social housing are having to pay more for the electricity and gas that fuels things in communal areas, such as lighting. That is because housing associations have to buy that at a commercial rate. They then pass the cost on to residents, and sometimes it is four or five times higher than the rates that residents pay for their personal energy consumption. Is there anything in the regulations to address that? If there is not, will the Minister write to me to say whether the Government are going to do anything about the extortionate rises for residents in social homes in my constituency?

[Amanda Solloway]

I thank the hon. Member for that good point. I will come on to exactly what this Bill is hoping to address, but I encourage him to write to me. I am also happy to have a face-to-face meeting.

I turn to the detail. The regulations set out that, with a few exceptions, all 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 or gas grid, or received via wire or pipe from a licence-exempt provider, where the customer is charged prices pegged to wholesale prices.

The Energy Bills Discount Scheme regulations for Great Britain and the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 provide for three elements of the scheme for end users of licensed suppliers, and the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 replicate them for end users of licence-exempt suppliers.

The first element is a baseline per-unit discount applicable to all non-domestic customer energy bills throughout the scheme’s duration. That discount will be applied if wholesale prices are above a certain price threshold.

The second element is that a higher rate of relief will be provided to non-domestic customers that carry out a substantial part of their UK activities in certain energy and trade-intensive sectors, following a review of the operation of the previous energy bill relief scheme. Those industries have been identified as being less able to pass through their increased energy costs to customers because of international competition. As with the baseline element of the scheme, the discount is applied if wholesale prices are above a certain level.

[Kevin Brennan (Cardiff West) (Lab)]

I thank the Minister for giving way. I raised this in the House some time ago at business questions. Am I right in saying that the energy-intensive element will cover things such as libraries, museum activities, the operation of historical sites and buildings, and similar visitor attractions such as botanical and zoological gardens, but not recording studios, which use a great deal of energy and are subject to international trade and competition? If that is the case, why is the Minister favouring making penguins eligible but not Arctic Monkeys?

[Amanda Solloway]

I thank the hon. Gentleman for the question. I know of his keen interest in production studios, because we have had conversations about this before. This is for the energy and trade-intensive industries that will be receiving the additional payment. However, I am of course really happy to have a conversation, and I can assure him that I have been meeting with all stakeholders to discuss such matters.

The EBDS regulations cover the process by which the energy supplier is reimbursed by the Secretary of State for discounts that it gives. The EBDS (Northern Ireland) regulations prevent end users who are outside Northern Ireland from receiving the discount to their bills.

The EBDS regulations cover essential operational matters, including information and reporting obligations, enforcement powers and powers to impose civil penalties in respect of missing or defective declarations. The EBDS (Non-Standard Cases) regulations support the operation and delivery of grant funding to customers that receive gas or electricity from licence-exempt suppliers. They 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 the EBRS to include the cohort of non-standard customers who receive their licence-exempt energy via private wire or pipe at a price pegged to wholesale rates.

The Energy Bills Discount Scheme Pass-through Requirement Regulations 2023, the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 and the EBDS (Non-Standard Cases) regulations require 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 to their end users.

The regulations set out obligations on the intermediary, including calculating the amount, providing end users with information about that, and passing on the benefit, as soon as reasonably practicable. They also set out the dispute mechanisms available and provide for a robust enforcement and compliance regime.

[The Chair]

Order. We have a Division. If Members will come back as soon as possible, I will suspend this sitting until the Division is over and we are all back.

--- Later in debate ---

[Amanda Solloway]

To conclude, the EBDS 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 to the national infrastructure. These regulations are crucial for the establishment and effective operation of the schemes. The scheme complements the existing large-scale support that the Government have provided during the energy crisis. I hope the Committee will support the measures and their objectives.

--- Later in debate ---

[Amanda Solloway]

I thank hon. Members for their contributions to this debate. First, I address the question of whether these instruments are the end of the legislation in this area. I sincerely hope so. However, if there is anything to add when we meet tomorrow, I will of course let the hon. Member for Southampton, Test know, but it is very much my clear understanding that they are the end.

I turn to the point made by the hon. Member for Cardiff West about the music industry. I understand his great passion. He indicated very clearly why the industry is so important to the whole United Kingdom. He mentioned that he is very proud of our music industry—I am as well. I will attempt to explain the reason why we have these schemes. If I am unable to give a full enough explanation, as always I will be happy to offer a further meeting. Within the discount scheme, there is the universal level, which I believe is the level originally mentioned by the Department for Digital, Culture, Media and Sport Minister, my hon. Friend the Member for Hornchurch and Upminster. On that level, support will be given across all of the non-domestic industry. That is my understanding of the support that the music industry will be receiving.

Clearly, the energy-intensive industries needed more support based on the energy that they use, and the fact that a lot of the work is international was also taken into account. The list that the hon. Member for Cardiff West referred to was the standard industrial classification list, known as the SIC list. That is the standard that we used to define the energy-intensive industries that were to have the additional discount. If I have not explained that fully, I am happy to have a meeting with the hon. Member at a later date.

[Dr Whitehead]

The Minister mentions the so-called SIC list. That is an interesting list in so much as it provides, as my hon. Friend the Member for Cardiff West said, a number of categories of energy-intensive industries. Some of those categories are very narrowly drawn, and some are very widely drawn. His point, at least in part, was that some of the categories within the energy-intensive classification for the higher level of funding are very tightly drawn, and therefore they come into that level, whereas others are very widely drawn.

I mentioned the discrepancy between ornamental or leisure gardens and horticulture, which is often very intensive, and between horticulture and agriculture. Clearly, agriculture is outside the energy-intensive industry classification, but because horticulture is classified within agriculture it does not get in, even though it has similarities with things in the energy-intensive list. I wonder whether the Minister will find time, at some stage, to look at the SIC list to see whether it does the job that we think it does when it comes to ensuring that people get the assistance. Energy-intensive industries should be well enough drawn to ensure that we do not have the sort of anomalies that my hon. Friend the Member for Cardiff West thinks we have.

[Amanda Solloway]

The hon. Gentleman makes an interesting point about the SIC list. That is obviously the list we are using at the moment. We have taken a consistent approach to identifying the most energy and trade-intensive sectors with all the sectors that meet the agreed threshold to be eligible for this support. The Government are committed to continuing to provide essential energy bill support to eligible UK businesses, charities and public sector organisations until April 2024, to help avoid unnecessary financial pressures and job losses resulting from the ongoing situation in the wholesale market.

In addition to the baseline discount for all non-domestic consumers, the new scheme also provides, as we have discussed at length, much-needed targeted support for energy and trade-intensive industries and consumers on heat networks. That additional support will ensure that those most exposed to volatile energy prices and international trade are supported while limiting the fiscal burden on the taxpayer. The methodology ensures that the scheme captures those industries that have been identified as being less able to pass through their increased energy costs to customers because of international competition, as demonstrated by the level of trade intensity, and require an additional level of support. The pass-through requirement sets out how the benefit is passed on to end users in a reasonable and just way. The delivery of this calculation has been designed to ensure that it is not prescriptive but supports all scenarios.

By replicating existing civil enforcement mechanisms, we hope to avoid any complications for end users and provide clarity on how disputes can be raised. My Department has published clear guidance on gov.uk, both for intermediaries and for end users, that provides detailed information to help those affected. We are keen to ensure that all end users, including those who are vulnerable, receive the benefits of the schemes to which they are entitled. We will continue to review our pass-through requirement communication strategy, including reviewing guidance on gov.uk and offering engagement sessions to ensure that intermediaries understand their obligations and that customers receive the benefits to which they are entitled. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the Energy Bills Discount Scheme Regulations 2023 (S.I. 2023, No. 453).

ENERGY BILLS DISCOUNT SCHEME (NORTHERN IRELAND) REGULATIONS 2023

Resolved,

That the Committee has considered the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 (S.I., 2023, No. 454).—(Amanda Solloway.)

ENERGY BILLS DISCOUNT SCHEME (NON-STANDARD CASES) REGULATIONS 2023

Resolved,

That the Committee has considered the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 (S.I., 2023, No. 464).—(Amanda Solloway.)

ENERGY BILLS DISCOUNT SCHEME PASS-THROUGH REQUIREMENT REGULATIONS 2023

Resolved,

That the Committee has considered the Energy Bills Discount Scheme Pass-through Requirement Regulations 2023 (S.I., 2023, No. 463).—(Amanda Solloway.)

ENERGY BILLS DISCOUNT SCHEME PASS-THROUGH REQUIREMENT (HEAT SUPPLIERS) REGULATIONS 2023

Resolved,

That the Committee has considered the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 (S.I., 2023, No. 455).—(Amanda Solloway.)

Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023

Amanda Solloway Excerpts

Monday 15th May 2023 General Committees

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I beg to move,

That the Committee has considered the Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023 (S.I. 2023, No. 428).

It is a great pleasure to be here under your chairmanship, Mr Gray. The regulations were laid before the House on 17 April 2023. Their purpose is to ensure that benefits from applications to the non-domestic alternative fuel payment are passed through to end consumers.

The Government delivered critical support to households, businesses and other non-domestic consumers in response to the unprecedented rise in energy prices. We brought forward emergency legislation and moved at pace to deliver a range of schemes to disburse financial support appropriately. Those schemes include the energy bill relief scheme, which provided a discount on non-domestic consumers’ gas and electricity bills.

The non-domestic alternative fuel payment scheme serves a crucial purpose in ensuring that businesses and organisations that are not on the gas grid, but instead rely on alternative fuels for heating, are not left behind and that they receive a comparable level of support to users who are on the gas grid and have received support for their gas usage. Eligible businesses and organisations are entitled to a payment of £150. In the vast majority of cases, consumers will have already received that £150 through the electricity supply accounts registered at qualifying properties. In addition to the basic £150 payment, we are providing a top-up payment to businesses and organisations consuming a very high volume of kerosene heating oil. The top-up payments start at £750.

An application service was opened on 20 March so that eligible non-domestic customers could claim a top-up payment. Additionally, we provided an application process for businesses and organisations to apply for the basic £150 payment in the limited circumstances where they would not have received it through electricity suppliers—for example, for alternative fuel users who do not have an electricity supplier and therefore could not receive a payment through that route.

Previously, we have introduced regulations to ensure that where the £150 payment was paid to an intermediary through its electricity supplier, the intermediary would be obligated to pass the financial benefit on to the end user. Those regulations were laid in February and were debated by this House in March.

[Hilary Benn (Leeds Central) (Lab)]

The explanatory memorandum states that intermediaries should pass on the payment and “must” follow the regulations in calculating the pass-through amount. The next paragraph, 7.8, states that if they do not pass through the whole amount,

“they must demonstrate to the end user that the amount they are passing on is just and reasonable”.

How much discretion is there to decide what a reasonable amount is? If it came to a civil debt, referred to in paragraph 7.11, would the court have any role in deciding whether the calculation was fair? I am trying to understand how that will work in practice.

[Amanda Solloway]

I believe that the right hon. Gentleman pre-empts what I am about to come on to.

The regulations extend the principle of the earlier regulations. They ensure that payments made following an application are subject to the same obligation to pass the financial benefit on to the end user. They also adopt the approach taken by the earlier regulations for this scheme, and for other energy schemes such as the energy bills support scheme and the energy bill relief scheme.

Let me explain exactly how these pass-through regulations work. They make it mandatory for inter-mediaries to pass through the financial benefit of the scheme to end users. That is needed because in some cases payments may be made to an intermediary and not to the end user of the energy. We need to ensure that payments can be passed on to the end user in a way that is fair.

An end user is an individual, business or organisation that consumes energy and pays for that energy usage through their intermediary—for example, their landlord. That includes a wide range of different arrangements. For example, a tenant may pay their landlord a service charge, or they may pay all-inclusive rent, but they are ultimately paying for the energy consumed at a non-domestic property, so it is only right that they benefit from our support schemes.

As with the other energy price support schemes, the regulations require that support be passed on in a “just and reasonable” way. The regulations were drafted in this way to account for the many kinds of relationships between an intermediary and an end user. If we took a narrow definition of “just and reasonable”, we could run the risk of inadvertently excluding intermediaries from the pass-through requirements. The regulations also accommodate scenarios where intermediaries have multiple end users to pass the support on to, and they make it clear when and how intermediaries should communicate with end users regarding the benefit being passed on.

Our approach to enforcement is consistent with the pass-through regulations for the £150 payment through electricity suppliers, and those for other energy schemes, such as 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, the user will be able to pursue recovery of the benefit through civil proceedings. Should a court rule in the end user’s favour, they would be entitled to the payment plus interest, which is set at 2% above the Bank of England’s base rate.

[Hilary Benn]

Having given the Committee the benefit of her explanation, will the Minister give way again?

[Amanda Solloway]

Yes.

[Hilary Benn]

I am grateful. If it comes to a civil debt being taken to court, would the court have the ability to decide for itself whether the amount that had been passed through was “just and reasonable”? In other words, could it look at the regulations, interpret them and say, “Actually, intermediary, I don’t think you’ve calculated this correctly, and therefore we are going to award a different amount”?

[Amanda Solloway]

The right hon. Gentleman makes a really important point. The whole premise of the regulations is to ensure that everyone is treated fairly and that we are passing on the benefits to all the people who should be receiving them. If he would like, I am happy to write with a fuller explanation.

The regulations 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 has been 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 the other energy schemes.

With respect to the requirement to pass on information, it is important to reiterate our view that 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 this reason, the regulations do not provide a specific enforcement mechanism in relation to the obligation on intermediaries to provide information to the end user. Nevertheless, we consider that there remains value in retaining the requirement in the instrument, on the basis that we expect 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, who can use them to contact their landlords should they be concerned about the application of the pass-through requirements.

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

--- Later in debate ---

[Amanda Solloway]

I thank the right hon. Member for Leeds Central and the hon. Member for Southampton, Test for their remarks and contributions. I can give my assurance that the Government have been looking at all the schemes and endeavouring to ensure that they are fair and equitable for all. That is the reason for the regulations.

The regulations are necessary to provide that the support of the non-domestic alternative fuel payment scheme, following an application, reaches the businesses and organisations that need it, as we all agree. The £150 payments delivered through electricity suppliers represent the main part of the scheme, but the top-up payment for higher uses of kerosene heating oil plays a crucial role in ensuring that high users of kerosene are able to meet their energy costs at this time of inflated prices.

The top-up payments start at £750 for properties consuming 10,000 litres annually, but they are uncapped and progress upwards in line with the volume of kerosene consumed. The payments support a wide range of non-domestic customers, such as businesses, schools, hospitals and churches, that are not connected to the gas grid. The support is crucial to ensuring that they receive a comparable level of support to users that are on the gas grid. We opened the application process for the top-up payment in March. We additionally opened application routes for the small number of customers that could not receive the £150 payment from an electricity supplier. We are now processing payment as quickly as possible.

The previous pass-through regulations established a set of obligations on intermediaries receiving the basic £150 payment through an electricity supplier to ensure that that support is passed on appropriately to the end users. These regulations rightly ensure that the top-up payments are subject to the same requirements and that end users are protected appropriately. Additionally, they will ensure that the protection is extended to the small number of users that needed to apply for the basic £150 payment.

We are mindful of comments received about these regulations and previous pass-through regulations, but it is important that the non-domestic alternative fuel payment is delivered consistently as a coherent scheme. As the regulations cover only a small part of a wider scheme that is in place already, it is right that we have maintained the approach followed in the previous pass-through regulations for the scheme. We will continue to update and publicise our guidance on the gov.uk website to ensure that end users and intermediaries understand their rights and obligations. We will also continue to seek views and feedback from those impacted by the regulations, as well as key delivery partners. I commend the regulations to the Committee.

Question put and agreed to.

Energy Infrastructure Planning Projects

Amanda Solloway Excerpts

Tuesday 9th May 2023 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

This statement concerns an application, made under the Planning Act 2008 by Net Zero Teesside Power Ltd and Net Zero North Sea Storage Ltd, for development consent for a full-chain carbon capture, usage and storage project that includes a new gas-fired electricity generating station with post-combustion carbon capture plant, gas, electricity and water connections and a CO₂ pipeline network, located on Teesside.

Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report, unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The current statutory deadline for the decision on the Net Zero Teesside project is 10 May 2023.

The Secretary of State has decided to set a new deadline of no later than 14 September 2023 for deciding this application, to enable the Department to seek further information from interested parties and to ensure that there is sufficient time to allow for consideration of this information.

The decision to set the new deadline for this application is without prejudice to the decisions on whether to grant or refuse development consent.

[HCWS761]

Energy Bills Discount Scheme

Amanda Solloway Excerpts

Tuesday 25th April 2023 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

On 9 January 2023, the Government announced details of the energy bills discount scheme, which will come into force on 26 April 2023, with support backdated to 1 April 2023. This will follow on from the energy bill relief scheme, which ended on 31 March 2023, and has supported businesses and public sector organisations such as schools and hospitals by providing a discount on wholesale gas and electricity prices. The Government provided an unprecedented package of support for non-domestic users through the winter in the shape of the Energy Bill Relief Scheme, with total support of £7.3 billion expected to be provided under this scheme, shielding businesses and saving some around half of their wholesale energy cost.

Wholesale energy prices have fallen significantly since the introduction of the energy bill relief scheme. The energy bills discount scheme reflects this change and makes adjustments to the support provided under the energy bill relief scheme. The energy bills discount scheme strikes a balance between supporting businesses between 1 April 2023 and 31 March 2024 and limiting taxpayer’s exposure to volatile energy markets. The scheme provides long-term certainty for businesses and reflects how the scale of the challenge has changed since September last year.

The energy bills discount scheme will provide all eligible businesses and other non-domestic energy customers with a discount on high gas and electricity bills until 31 March 2024, following the end of the energy bill relief scheme. It will also provide businesses in energy and trade-intensive industry sectors with a higher level of support as they are less able to pass these higher costs on to customers due to international competition. The energy bills discount scheme price reduction will be linked to the wholesale element of a non-domestic customer’s gas and electricity bill and Government will reimburse suppliers in accordance with the scheme.

Further support will be available to domestic end users on heat networks, who fall under the energy bills discount scheme due to heat network operators having commercial energy contracts, to ensure they do not face disproportionately higher energy bills than consumers in equivalent households who benefit from the energy price guarantee. Heat suppliers will be required to apply for this support and then pass on any discounts to their customers in a “just and reasonable” way.

Eligibility for support under the energy bill relief scheme and the energy bills discount scheme will also be extended to additional non-standard cases not previously eligible. This includes: where non-domestic customers have received gas or electricity from licence-exempt suppliers via private wire—localised electricity grids connected to local distribution networks but linked to a privately-owned central plant which produces electricity; or pipe, where gas is conveyed to the customer’s premises by pipe; and where prices paid are pegged to wholesale energy prices.

Statutory instruments were made on 24 April and laid on 25 April. These will establish the energy bills discount scheme and ensure that essential energy bill support is provided to UK businesses in Great Britain and Northern Ireland, that are supplied both by licensed gas and electricity suppliers and licence-exempt suppliers. They will also ensure that any non-domestic business or individual that receives energy through an intermediary will also benefit from the energy bills discount scheme in a “just and reasonable” way.

The Government are also running a number of other energy support schemes. These include the energy bill support scheme which delivered a £400 discount to consumers during the winter period and the energy price guarantee which has been extended until the end of June and protects customers from increases in energy costs by limiting the amount suppliers can charge per unit of energy used.

[HCWS741]

Energy Suppliers and Consumer Rights

Amanda Solloway Excerpts

Tuesday 25th April 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

It is a pleasure to be here under your stewardship, Mr Hollobone. I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing this incredibly important debate. We are going to get together to have a further conversation, so I have listened with great interest to all her comments.

I take the role of Minister for energy consumers and affordability incredibly seriously. At least once a day I comment on the fact that affordability is at the heart of all that we do. It is vital to bring down energy bills and ensure that consumers are protected. One of my key drivers is to ensure that the vulnerable are not made more vulnerable. I regularly meet the chief executive of market regulator Ofgem. I spoke to vulnerable consumers at a summit yesterday, and continue to engage with lots of stakeholders, including Citizens Advice, and other suppliers.

The Government have made it clear to Ofgem that we expect it to be robustly enforcing the rules aimed at ensuring that suppliers treat their customers fairly. Suppliers should continually strive to adopt and embed a customer-centric culture. That relates to how suppliers behave, provide information and carry out customer service processes. Ofgem’s guaranteed standards of performance exist to ensure that suppliers provide automatic compensation when domestic customers’ switches are delayed, when customers are erroneously switched, when issuance of the final bill is delayed, when there are missed or late appointments, or if a supplier does not send an engineer who has the skills and experience to carry out the planned work.

If a customer thinks their meter is not working properly, the supplier should agree a timescale with the customer to complete the work. If a supplier does not do what it said it would, it should give the customers £30 compensation, as the hon. Member mentioned. For prepayment meter faults, if the consumer cannot get any electricity or gas, and they think the meter is faulty, they should contact the supplier. The supplier should come round and repair or replace it within three hours, or four hours on a weekend or bank holiday.

If the consumer thinks their meter is faulty but the power supply is still working, they should still contact their supplier, and the supplier should arrange a future appointment within three or four hours. If a supplier does not do what it said it would, it should give the customer £30 compensation. Suppliers must pay £30 compensation to customers within 10 days of breaching an individual guaranteed standard. If it fails to pay the customer in time, it must pay an additional £30. I listened closely to what the hon. Member said, and I know we will have further discussions about the suitability of this arrangement.

Suppliers are required to submit complaints data to Ofgem on a monthly and quarterly basis. Suppliers also publish domestic complaints data on their websites, including the top five reasons for complaints, and the measures they are taking to improve how they handle customer complaints. If the customer remains unhappy with the outcome of their complaint, they can approach the energy ombudsman. Ombudsman Services is an independent body that provides dispute resolution, and it is free for consumers. Ombudsman Services can investigate and, where appropriate, oblige the supplier to rectify the situation.

One area that needs to be improved relates to prepayment meters. We all heard about the incredibly appalling practices that occurred with the forced fitting of prepayment meters. The Government have made their strong feelings clear on the issue. I am glad that suppliers have now signed up to a more robust set of standards. The new code of practice will help, but we still need to ensure that we work together to deliver an energy market that works for everyone.

Ofgem has acted to improve protection for vulnerable households, increased scrutiny of supplier practices and introduced redress where meters were wrongfully installed. We have been crystal clear that fitting a prepayment meter by force for any customer must be an absolute last resort, after all other options have been completely exhausted. The Government will monitor the behaviour of suppliers very closely and will not hesitate to intervene if necessary.

On the issue of understanding energy bills, Ofgem has produced a short video and short written guides for households. Suppliers are required to maintain a telephone support line and to provide an explanation of the customer’s bill in plain and intelligible language. Again, I look forward to meeting the hon. Member to discuss that further and to discuss whether there are more things that we should and could be doing. There are resources such as Citizens Advice’s big energy saving network, which is a network of trained advisers who help people to understand energy use in the home and how to get the support that they are entitled to.

I thank the hon. Member for North East Fife for securing the debate. I can reassure her and parliamentary colleagues that the Government expect energy suppliers to provide good customer service and to look after their vulnerable consumers. The Secretary of State and I have made it clear that that is a top priority for Government. As I mentioned, I meet regularly with Ofgem and key stakeholders, such as Citizens Advice and the ombudsman, to discuss the experiences of consumers and how they can be improved. When suppliers are providing poor customer service, they should expect customers to switch to a better supplier. Although the market for switching for a better price is only just restarting after the gas price crisis, some customers have continued to switch to find better customer service. I look forward to meeting with the hon. Lady to discuss these matters further.

Question put and agreed to.