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

Lord Teverson Excerpts

Tuesday 16th May 2023 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend and the department for bringing this measure forward—it is deeply appreciated among businesses. Do we know what the duration of the support will be in this regard?

I take this opportunity to thank the department for bringing forward the impact assessment as part of this, because we are very quick to criticise departments when they do not include such assessments. On this occasion, however, it is very thorough and greatly appreciated. I have learned a new term—counterfactual. I am not quite sure what it means, but we are told that the option of this support is being considered against a “counterfactual of doing nothing”. I do not know whether this is yet another Americanism that has crept into the English language.

I shall just press my noble friend on one point. He has been quite clear about how the intermediaries are responsible for identifying the end-user, yet on page 4 of the 36th report, printed on 10 May by the Joint Committee on Statutory Instruments, it is clearly stated that the committee wishes to report defective drafting in Regulation 5. This refers to the fact, stated in paragraph 3.2 of the report, that there is

“no mechanism in the Regulations for enforcing these requirements. This reflects an approach adopted in previous instruments dealing with the pass-through of scheme benefits by intermediaries”.

How does my noble friend and the department respond to that charge against them?

That is the only question that I have. I wholeheartedly welcome the regulations before us this afternoon. It is extremely important that the support is given, particularly in areas such as rural areas which are off grid.

I know I said that that was the only comment that I had, but I have one last question. On the £150 going to the smaller users, does that mean that the civil action can be pursued through the small claims court, which obviously would not significantly add to their costs, if they had to bring such a claim to which my noble friend referred? I thank my noble friend and the department for bringing forward the statutory instrument before us today.

[Lord Teverson (LD)]

I thank the Minister for a very familiar speech. Obviously, in principle, we very much support the statutory instrument. What struck me about it, if I am honest, is that when it arrived in my inbox I thought, “I thought we’d done all this”. If you look at the graph on the impact assessment—like the noble Baroness, Lady McIntosh, I welcome it—the big heist in energy prices was in June last year, so we are a long way through from that, by almost one year. Maybe I have misunderstood something, but it seems to have taken a huge amount of time. I realise that the statutory instrument came into effect in April, but it seems an awfully long time has been taken in managing to get this amount of money. It may not be large, but it is important to non-domestic users.

I would be interested to understand from the Minister how well the pass-through mechanism has worked to date on the other scheme. Have there been complaints and have there been any court procedures for people to claim their 2% on their proportion of the original amount of money? Have there been complaints to the department, or has the Minister found that the scheme has worked fairly well so far, as I would hope?

I would also be interested to understand the number of businesses that the department expects should benefit from this scheme. That may be in the impact assessment— I tried to find it there, but I could not, and my apologies if that is so.

I want to come back to the area of enforcement. The Joint Committee was strong on this and rightly so. Big amounts of money may not be involved here but whoever wrote this statutory instrument, as with the previous one on pass-through, must have had their tongue well in their cheek when they said that people could go through a civil claim and get 2% on the money outstanding, given that, at most, it is a fraction of £150. This is still an invitation for people to say, “What the heck? I’m not going to bother with this bureaucracy and I’m not going to do it”. For a country that takes the rule of law seriously, it is a principle that when one has a statutory obligation, there is a method of enforcement if that is ignored. It may not be used but it should be there.

I therefore should be interested to hear from the Minister on those areas, particularly on how successful the existing pass-through arrangements have been to date.

--- Later in debate ---

[Lord Callanan (Con)]

I thank my noble friend Lady McIntosh, and the noble Lords, Lord Teverson and Lord Lennie, for their comments.

This instrument is necessary to ensure the proper delivery of the non-domestic alternative fuel payment scheme by allowing support to reach those who need it. The scheme is already in place and delivering much-needed support to non-domestic consumers across the UK. The scheme supports a wide range of businesses and other non-domestic consumers that are not connected to the gas grid. As I said, it is delivering a payment of £150, thereby helping businesses and organisations that rely on alternative fuels to meet their eligible costs. Most eligible customers should have already received their £150 payment by the end of March as a credit from their electricity suppliers. Where these payments were received by an intermediary, the pass-through regulations that we previously made ensure that they passed it on to the end users in a just and reasonable way. Although a relatively small proportion of businesses and organisations are entitled to a top-up payment, these payments are also important in ensuring that those consumers are not left behind and receive support comparable to those received by consumers on the gas grid and who have benefited from other schemes.

We opened an application service for the top-up payment on 20 March, and we are processing payments as quickly as possible. In addition to the top-up payment, we provided a route for customers to apply for the basic £150 payment in the limited circumstances where it was not possible for them to receive it through an electricity supplier. These regulations ensure that in all these circumstances, where a payment is made following an application, end-users benefit from the requirement that intermediaries pass on that support in a just and reasonable way. It is a case of extending the safeguards already in place for the earlier part of the scheme to payments made following an application.

On the specific points made in the debate, the noble Baroness, Lady McIntosh, asked about the duration of the support and the latest report from the JCSI. We are providing one-off payments to eligible businesses and organisations to ensure comparable support to that received by on-grid customers who have benefited from the energy bill relief scheme, and we are in the process of issuing payments to applicants. In response to the noble Baroness’s point about the JCSI’s comments on enforcement, also raised by the noble Lord, Lord Teverson, our view remains, as the noble Lord, Lord Lennie, correctly predicted, that there is little value in establishing a formal enforcement mechanism. However, we believe that it is important to include a provision on pass-through of information, as most intermediaries will comply with this.

The noble Lord, Lord Teverson, asked how successful the existing pass-through arrangements have been. We are not aware of any significant issues in the delivery of this scheme or the pass-through arrangements. Nevertheless, the scheme remains in progress, and we will continue to keep it under review and respond to any issues as they arise. As the scheme is still in progress, we are not yet in a position to say precisely how many businesses will benefit, but we believe that around 400,000 end-users will receive some level of payment under the scheme. That is a considerable amount of support.

[Lord Teverson (LD)]

I am grateful to the Minister for that. To clarify, is that the number of businesses that will benefit from this pass-through, as opposed to the scheme altogether?

[Lord Callanan (Con)]

No; that is the scheme altogether.