Energy Bill Relief Scheme Regulations 2022

Lord Teverson Excerpts

Wednesday 16th November 2022 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I take this opportunity to congratulate the Government and my noble friend the Minister on bringing through the enabling Act and in particular the regulations before us this afternoon. I commend the support the Government are giving both to non-domestic and domestic customers. If my noble friend will permit, I have a number of questions I would like to press him on, but that does not detract from my overall support for the scheme.

The Secondary Legislation Scrutiny Committee prepared a very helpful brief, which states that the instruments are made to delegate powers to enable the Secretary of State to make technical rules for the effective operation of the EBRS, including rules for the calculation and recovery of accounts. Paragraph 7.1 of the helpful Explanatory Memorandum appended to the regulations states that the Secretary of State

“can reimburse licensed non-domestic energy suppliers applying price reductions on customers’ bills representing the wholesale energy price element of the bill. This will allow non-domestic customers to receive the benefit of such a discount.”

I welcome what my noble friend said about landlords passing this on to those who operate the businesses; that will be very welcome indeed.

Paragraph 7.2 of the Explanatory Memorandum say that the Secretary of State is required,

“within 14 days of the schemes’ introduction date, to make rules about further reductions”.

The rules will apply to the supply of gas and electricity for the period referred to by my noble friend. Will there be an opportunity for the Committee or the House to see them in advance and to scrutinise them? Will they be laid before the House? I realise they are technical rules, but it would be helpful for us to see them.

Paragraph 11.1 refers to stakeholders, individual organisations and so forth. I would like to make plea for the plight of publicans in pubs, restaurants, bars and cafés, who will benefit from this scheme until the end of March. It is particularly welcome in the run-up to Christmas, and in January and February, which tend to be slow months, as it recognises their need to incur high energy and electricity costs to make a welcoming atmosphere. My noble friend is probably not in a position to tell us today—we will have to wait until tomorrow or even the March Budget—what will happen after this scheme expires. I do not want to be like Oliver Twist and ask for more, but it would be helpful for businesses to know what the future will be. My noble friend has rightly identified that the regulations and the enabling legislation under which they fall are intended to prevent closures and job losses resulting from high wholesale energy costs, which we know are largely global in nature.

I also make a plea for non-domestic customers and businesses that operate in rural areas. The Minister and I are from the north-east of England. I grew up there and represented part of North Yorkshire for 18 years in the other place. In about a week’s time, we will have the first anniversary of Storm Arwen, when a number of businesses closed. Those who were not fortunate enough to have generators were heavily penalised. As part of learning from that, I met our local director of the NFU, which is keen to work with the Government and other bodies to see how we can enhance infrastructure and the grid in rural areas where we are heavily dependent on off-grid fuels such as oil, solid fuel and LPG, and to look at what prospect there might be for developing those off-grid resources. It is basically about lessons learned from Storm Arwen, in what was a very difficult time.

These regulations were debated in the other place by the Delegated Legislation Committee on Monday 14 November. It was asked then why there had not been a greater assessment of the impact of administration and resource costs on Ofgem, which will be heavily involved in monitoring compliance. Has BEIS looked at that? Will it have time to do so in the next few weeks? Secondly, if a company has outstanding debt on bills of greater than 28 days, it effectively does not qualify. For what reason has that benchmark been chosen? With those few questions, I wish Godspeed to the regulations and congratulate my noble friend and his department on the work they have done in this regard, for both non-domestic and domestic customers.

I have one further question, which relates more to domestic customers. What I would identify as sharp practices are being developed by electricity providers on the back of the Government’s generosity in this regard. When a customer is in credit, their direct debit payments are going up, which I can see no rhyme or reason for. If a customer is in credit, why on earth would you seek to increase their direct debit, particularly when the Government have lent the generous help that they have? Another such practice happens when, no matter how many meter readings they may give, the customer ends up with an estimated bill. Again, that seems to be a way of bumping up the price. I would welcome any response that my noble friend has to what seem to be developing sharp practices.

[Lord Teverson (LD)]

My Lords, we on our side very much welcome this relief for businesses and commercial operations with regard to energy prices. Again, I very much echo the noble Baroness, Lady McIntosh, on the fact that the evaluation does not take place until three months. I understand the issue of how you would evaluate it before that, but there is no obligation to put forward further plans until the end of the scheme, after six months. I would be interested to hear an answer on that.

--- Later in debate ---

[Lord Callanan (Con)]

The noble Lord makes a very good point. As I said, we will conduct a review as soon as possible with the aim that it will be published before the end of the year. That will inform businesses of where we hope to go with the scheme after its expiry in April. That applies not just to businesses in Northern Ireland but to small businesses across the whole United Kingdom.

In conclusion, the Government remain committed to ensuring that consumers receive help with the rising cost of living and with energy costs. These regulations are vital to ensuring that support is delivered this coming winter. I commend this draft instrument to the Committee.

[Lord Teverson (LD)]

I thank the Minister for his reply to my point on fraud but, as he has not replied on holiday home lets, I assume that, if they are on business rates, they will get this benefit.

[Lord Callanan (Con)]

There are two aspects to this support. The price guarantee applies to domestic consumers and the EBRS applies to business consumers. If it is registered as a domestic premise, the home owner would receive this support in the same way as other owners of multiple homes would receive it—under the domestic scheme. If it is registered as a business, again they would receive a price discount. That applies to all businesses across the UK, with a few exceptions for some generators.

I take the noble Lord’s point about how this will probably go down badly in the areas concerned, but the scheme was rolled out at pace. We saw similar effects with the Bounce Back Loan Scheme during the pandemic. By the very nature of these schemes, if you do not spend years putting the scheme in place, going through every detail and exempting certain groups that might perhaps be undeserving of the support, there will be cases that most people regard as slightly unfair. That is in the nature of rolling something out quickly. We needed to get the support out quickly, which is why this has been done that way.