Energy Bills Support Scheme and Alternative Fuel Payment Pass-through Requirement (Northern Ireland) Regulations 2023

Lord Lennie Excerpts

Monday 30th January 2023 Grand Committee

[Lord Teverson (LD)]

My Lords, I thank the Minister for going through yet another of these SIs. I am sure he will not mind if I ask him some just and reasonable questions about it.

First, I note that the measure came into force on 12 January, so it is already in place. Obviously, it is administered, to a degree, by the energy companies, but who is policing it? Is it the Northern Ireland civil servants, or is it BEIS directly? I would be interested to understand that. If it is Northern Ireland officials, are we confident that sufficient management governance will take place from here?

I welcome that the Government and the department have spoken at length to consumer organisations in Northern Ireland. I am interested to understand whether there have been any complaints yet of end-users not receiving this when they feel that they should have, to get some idea of how well it is working.

The Minister talked about the method of civil law, and having fines—plus, generously, an interest-rate benefit if people manage to get through a whole court process. We have said before that it is very unlikely that much of that would happen, but, if an intermediary ignored the need under this legislation to pass on those payments, would the Government have the ability to prosecute that person? I can imagine there being a certain number of landlords who will just think, “No one’s looking at me, there’s not a lot of publicity about this, I’ll just keep the money”. I would be interested to understand whether there is, at the end of the day, a criminal long-stop prosecution ability in terms of fraud and so on. Also, will the Minister say how many more SIs around these schemes are still to come?

[Lord Lennie (Lab)]

My Lords, I thank the Minister for introducing this scheme. If he feels a bit of déjà-vu, it is because we have already been here. We discussed this on the UK scheme. This scheme is to ensure that support provided to intermediaries on behalf of the end-user in the energy bill support scheme and the alternative fuel payment in Northern Ireland must be passed to the intended recipients. This is welcome and important, but there are questions about what difference the instrument will make to intermediaries if they do not do it.

The Explanatory Memorandum states:

“Relevant intermediaries are any individual that is party to a domestic electricity contract … and passes on the costs of the energy supplied under this contract to an end user of the energy supplied … Intermediaries should pass on the discount irrespective of how the end user pays for their energy use … If an intermediary does not pass through the whole of the scheme benefit provided to them, then they must demonstrate to the end user that the amount they are passing on is just and reasonable, including taking into account the extent to which the intermediary’s charges to end users reflect the increased cost of energy as a result of the energy crisis.”


The Minister said that intermediaries include landlords. They do indeed, but they also include sublets, student accommodation, social housing providers, local authorities, site owners, site managers, marinas for onshore power, combined heat and power operators, electric vehicle charging operators and other residential building managers. It is possible for an intermediary also to be an end-user because they can live in the scheme that they manage. Given the variety and range of intermediaries and the complexity of this calculation, will it have any impact on the number of intermediaries that do or do not pass the benefits through?

The Explanatory Memorandum also states:

“The intermediary must, within 30 days of a scheme benefit being provided, provide information to the end user in writing ... The intermediary must ensure the end user receives the pass-through amount as soon as reasonably practicable ... Where an intermediary fails to effect a pass-through to which an end user is entitled, that end user may recover the amount from the intermediary as a civil debt.”


How many end users will be aware of this? How many will know about this scheme at all? If I am a landlord, is it worth the risk of not passing it on and sitting and waiting to see what happens? If I do not get any orders to justify, I can just keep the funds. It is a small amount of money to a court—a maximum of £600—but to a landlord who may have multiple lettings, it can be a considerable amount of money. Do the Government expect end users will do this for £600? Will fees make it not worth while for them to do it? How will intermediaries be disincentivised from taking this gamble? There is no penalty if you are found not to have passed on the money. Intermediaries are just ordered to pass on the funds in the scheme, plus 2% above interest rates. It does not seem to be a huge gamble that the intermediary might be taking. Will the Government not be enforcing this in any way? As the SLSC said, there is inequality of arms. It almost encourages intermediaries to take a chance, and the victims are the tenants and the end-payers of the scheme.