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

Kevin Brennan Excerpts

Monday 22nd May 2023 General Committees

[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.

--- Later in debate ---

[Kevin Brennan]

It is a pleasure to serve under your chairship, Mrs Latham. I want to go back to a point that I made in an intervention on the Minister and emphasise that I am a little bit befuddled about why particular sectors have been chosen over others. I have read the impact assessment and the explanatory notes, and I have tried to work out why that should be the case. I am focusing on recording studios because I take an interest in and have some knowledge of them, although my questions may well apply to other sectors.

I asked the then Secretary of State for Digital, Culture, Media and Sport on 26 January 2023 about support for the financial viability of recording studios. They have been through some very difficult periods, particularly after covid. I give credit to the Music Producers Guild for their work, and to the Government for their response, to try to enable studios to work through that period. The Minister of State, Department for Culture, Media and Sport, the hon. Member for Hornchurch and Upminster (Julia Lopez), responded to my written question with the sorts of support that might be available, and she said—this is the bit that is pertinent to today’s SIs:

“Since then, the Government announced a new Energy Bills Discount Scheme to help support businesses, like recording studios, to tackle rising energy costs.”

The Minister said, in terms, in her answer, which was submitted at 14.38 on 26 January 2023, that this scheme would be of assistance to recording studios.

I suppose that in a broad sense we could say that about any business, because in the baseline support that the Government are offering, pretty much any business —and, indeed, other non-domestic energy consuming organisations—could be eligible for support under the scheme if energy prices rise above a certain threshold. For the most part, however, that is not what is anticipated in the impact assessments or the explanatory notes, because it is expected, although we cannot be certain, that prices will not rise to a threshold sufficient to trigger that support. That is why the new scheme will offer a lower level of support than was previously available to businesses.

The implication of the DCMS Minster’s answer was that recording studios would be supported, however, and it would seem that that is not the case. As I indicated earlier, although there is no list in the impact assessment or the explanatory notes, if we dig around a bit we can find a list of industrial sectors that will be eligible for the energy and trade-intensive industries scheme under these SIs. I hope that it is up to date; the Minister for Energy Security and Net Zero can correct me if I am wrong. It is a very long list, and it includes all sorts of things that we might expect, such as the mining of hard coal, the manufacture of sugar, the manufacture of beer, the manufacture of other knitted and crocheted apparel, the manufacture of ceramic household and ornamental items, the cold rolling of narrow strip, the processing of nuclear fuel and the casting of steel.

I have worked in the steel industry myself, and I understand why such sectors are likely to be supported. Then there is a sequence of activities eligible for this higher level of support, including the list that I mentioned in my intervention earlier. They include things like libraries, archive and museum activities, the operation of historical sites and buildings and similar visitor attractions, and botanical or zoological garden and nature reserve activities. I am sure that those sectors will be very pleased to be eligible to apply for the higher-rate scheme; that is the one that is not automatic—it has to be applied for. However, I do not understand why those particular sectors are eligible but recording studios are not.

I took the all-party parliamentary group on music to the AIR recording studios in north London some months ago. Just to provide some context, that is one of the largest recording studios in the country; it is along the lines of Abbey Road. It was founded by the late, great Sir George Martin. It is a very major earner of export currency for this country, and a very major consumer of energy; by their very nature, recording studios have a lot of equipment that uses a lot of energy. Furthermore, human beings work in them so they have to be kept cool.

I will give an example. While we were there at AIR studios, we witnessed preparations for a major orchestral session. It might surprise some hon. Members to know that the session was to record not a piece of classical music or even a film score, but the score for a video game. That video game was being produced by Sony. In the control room during our visit, there was an executive over from Los Angeles, visiting AIR to help to set up the whole of that recording session. I asked that executive, “Why would you come to London to do this? You could do it in Los Angeles or in some other jurisdiction. This is not cheap. All of these people are union members. These are very expensive facilities you’ve got here.” His answer, which I think should encourage us all, was, “Because it’s the best place in the world to do this. We like coming here, and we know that what we get here will be of the highest quality.”

Those activities are significant for our trade figures. There is an industry that makes a significant impact on our trade figures—one of the few industries in the country that is a net exporter and earner of foreign currency. We are one of only two countries in the world of which that is true in relation to the music industry. It spends millions and millions of pounds yet is ineligible under the Government’s scheme, despite the high energy costs involved in running a major recording studio of that kind, that we are discussing here today in relation to these statutory instruments.

What I want to understand from the Minister—[Interruption.] I hope the in-flight refuelling will help her explain this to me. What I want to understand is why she would not include recording studios if these other cultural-type businesses are included. All the energy-intensive manufacturers are included on the list and the cultural activities, such as libraries, archives, museums, historical sites, visitor attractions and botanical and zoological gardens, all qualify, but recording studios do not.

If the Minister was able to give me an answer to that question, it might help me to decide to support what, apart from what I have pointed out, could be seen as reasonable actions by the Government to support businesses with their difficult energy bills.