Energy Bill Relief Scheme Regulations 2022 Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022 Energy Bill Relief Scheme (Northern Ireland) Regulations 2022

Nusrat Ghani Excerpts

Monday 14th November 2022 General Committees

[The Minister for Science and Investment Security (Ms Nusrat Ghani)]

I beg to move,

That the Committee has considered the Energy Bill Relief Scheme Regulations 2022 (S.I. 2022 No. 1100).

[The Chair]

With this it will be convenient to discuss the Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022 and the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022. At the end of the debate, I will put the Question on the first motion and then ask you, Minister, to move the remaining motions formally.

[Ms Ghani]

It is a pleasure to serve under your chairmanship, Sir Roger. I am doing my best to represent my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), who is the Minister responsible for this brief. On a good or a bad day, I might look like him; I am not quite sure.

I will give some background to the regulations. The energy bill relief schemes, which I will collectively refer to as EBRSs, and the energy price guarantee—the EPG—have been introduced at pace to protect the public from the effects of soaring wholesale energy prices. The ERBSs are intended for those on non-domestic tariffs and the EPG for those on domestic tariffs. Unconstrained high prices would put significant financial pressure on UK businesses, charities and public sector organisations such as hospitals and schools. They would significantly increase the cost of living for households too. The wider negative effects of such economic pressure would be severe and materialise very quickly in the absence of an intervention of this kind.

The EBRS regulations for Great Britain, the EBRS Northern Ireland regulations and the EPG regulations have been created under the Energy Prices Act 2022, which gained Royal Assent on 25 October 2022. The regulations are essential secondary legislation required to implement the schemes.

I now turn to the detail in the EBRS GB and EBRS NI regulations. The regulations set out that, with few exceptions, all non-domestic customers with electricity and gas contracts from licensed non-domestic energy suppliers will be eligible for a discount. The discount will be applied to the wholesale price element of the bills, and the regulations set out how the discount has been calculated. The regulations cover the process by which the energy supplier is reimbursed by the Secretary of State for the discount. The regulations also give powers to the Secretary of State to delegate this function where appropriate. Further provision is included to prevent suppliers or customers from deriving greater benefit than is intended, to protect the integrity of the schemes. The regulations provide for an additional reduction to be applied for qualifying financially disadvantaged customers, who are supplied under the so called “deemed” or “out of contract” contracts.

The EBRS NI regulations prevent end users outside Northern Ireland from receiving a discount to their bills. Finally, the regulations cover essential operational matters including information, a reporting obligation, enforcement powers and powers to impose civil penalties in respect of missing or defective declarations.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Will the Minister give way?

[Ms Ghani]

Perhaps if the hon. Gentleman allows me to continue, I will answer his question. To accompany the regulations, we have published a suite of legally binding rules and non-statutory guidance, which provides further detail on how the schemes work.

I turn to the energy price guarantee. The EPG schemes in both Great Britain and Northern Ireland are intended for customers on domestic tariffs. The Energy Prices Act 2022 set out that EPG NI schemes are to apply to those with domestic electricity and gas supply. The EPG regulations define domestic electricity supply and domestic gas supply for Northern Ireland. Those definitions will mean that some non-domestic premises will be in scope of the energy price guarantee electricity scheme in Northern Ireland. That includes some places of worship that have similar metering and tariff arrangements to domestic premises.

These non-domestic premises will receive EPG support instead, since there was no timely way for energy suppliers to disaggregate them from traditional domestic premises with similar metering and tariff arrangements. Both the EBRS and the EPG remain a source of critical support for non-domestic and domestic consumers across the UK. The measures in these regulations are crucial for the effective operation of the EPG and EBRS, and the schemes will complement other large-scale support that the Government are providing for energy and the cost of living. I hope that the Committee will support these measures and their objectives.

[Alan Brown]

On the EBRS, can it be absolutely clarified that the discount is applied to a bill before the non-domestic customers have to pay the money to the supplier, or is it retrospective?

[Ms Ghani]

I think the answer is yes to the former, but when I make my concluding remarks I will ensure that the answer is word-perfect for the transcript. Without further ado, I commend the regulations to the Committee.

[The Chair]

Dr Whitehead, you understand that the first set of regulations was moved first, but you can speak to all three sets together.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Thank you, Sir Roger. It is a pleasure to serve under your chairmanship.

Having agreed, as we of course should have done, to discuss all these statutory instruments in one go, we have a great deal of ground to cover very quickly in our discussions this evening. I will start my remarks on all the SIs by saying that although the Opposition have a number of concerns about the way the legislation itself was drafted and how the legislation was brought forward—I want to say a few things about that in a moment—we of course understand the pressing need to get the regulations on to the statute book as soon as possible, because of the speed at which all the arrangements have to be undertaken. We therefore do not intend to oppose them this evening, but I have some questions and thoughts for the Minister and I would be obliged if she responded to them, either this evening if she is able to or, if necessary, in writing at a future date.

The first question is about the circumstances in which these SIs have come about. As the Minister will know, they have come about from the Energy Prices Act, but also under particular powers placed in that Act to enable the Secretary of State to do an enormous number of things—to energy licences and various other things—without any further recourse to anybody.

The Minister will be familiar with section 21 of the Act, entitled “Power of the Secretary of State to modify energy licences etc”. It is not clear in that section whether any secondary legislation is required for a number of these modifications, if at all. Consequently, it appears that some of the things that are or should be relevant to our discussions this evening have gone through either in negative SIs—one in particular is on designation of local authorities—or with no reference to this Committee or this House at all.

I accept that that legislation is now on the statute book and it is what we are working with. As the Minister will know, there were suggestions at the time that the elements of the Bill that would allow things in effect to escape secondary scrutiny might at the very least have sunset clauses so that there is recognition of the urgency of the issues that we face at the moment but the provisions do not lie on the statute book for ever; that would enable the Minister to do whatever they wanted at a future date without any reference to anybody.

Considerable concerns have been raised by industry about the nature of these arrangements and what that means for investment certainty. Companies may be concerned that the licence arrangements could be changed—overnight, for example—without any further recourse either to them or to this House. They would consider that potentially to be a bit of a problem in relation to investment certainty for the future. Will the Minister say something not just about the measure we are scrutinising, but about future legislation—

[Ms Ghani]

I am not sure that is in scope.

[Dr Whitehead]

I hope it is in scope, because—

--- Later in debate ---

[Ms Ghani]

I thank hon. Members for their valuable contributions to the debate and for their understanding about the speed required to ensure that support is available in Northern Ireland.

Fundamentally, we are trying to provide a wholesale discount that could halve people’s bills, and that is what we are here to do. It is reassuring to know that the schemes are already in force and are delivering support to households and organisations across the UK. I hope that will go some way to assure the public that the Government are committed to taking decisive action against this energy crisis. We are confident that our non-domestic schemes will seek to avoid firm closures and redundancies, and ensure that vital public services and charities can continue to operate over the winter.

The scheme has been designed to operate robustly, and it guards against fraud and gaming. We will continue to monitor the scheme to ensure that support is provided to the people and businesses it is designed to help. We are committed to reviewing the scheme. We will consider how best to offer further support to customers who are most at risk from energy price rises beyond April 2023.

I will do my best to answer all the very sensible questions that were asked. If I do not respond to them all now, be assured that I will make sure that the appropriate Minister’s Department puts everything in writing. I am also very keen to answer the questions raised by Mr Brown, who normally asks for my resignation. This is a rare moment when he has not.

[Alan Brown]

I’m just waiting.

[Ms Ghani]

I will come to Mr Brown first—

[The Chair]

Order. I should gently remind the Minister that even in Committee we still refer to Members by constituency and not by name.

--- Later in debate ---

[Ms Ghani]

Forgive me, Sir Roger; my apologies.

As mentioned, the discount will be applied before the business is billed. Another point was raised about the 28 days in arrears. All eligible customers will be eligible for the EBRS discount. The arrears point applies only to the extra discount. Suppliers will apply those to deemed or out-of-contract tariffs.

A valid question was raised about landlords. The Energy Bill Relief Scheme Pass-through Requirement (England and Wales and Scotland) Regulations 2022 and the Energy Bill Relief Scheme and Energy Price Guarantee Pass-through Requirement and Miscellaneous Amendments Regulations 2022, which were laid before Parliament on 31 October and 4 November respectively, set out the requirements for intermediaries such as landlords to pass through the benefits of EBRS, the GB EPG and the GB energy bills support scheme to end users who, for example, pay for their energy through all-inclusive bills.

[Alan Brown]

I thank the Minister for giving way. What I was actually seeking was further clarity on the enforcement action the Government can take to actually ensure that that is happening and that those are being passed on. I am happy for somebody to write to me on that.

[Ms Ghani]

We will make sure that that is in writing. The regulations have been laid, but the hon. Gentleman is absolutely right; we want to make sure that those benefits are passed through.

A question was raised about the £100 payment, which comes on top of the £400 discount. This is what we are here to do today: to make sure that people have all the support they need. The regulations are here to support economic growth and ensure that firms do not close down and redundancies do not happen. The scheme is fundamentally there to support those people and public services. I believe that an impact assessment was published for the overall EBRS scheme across the UK, along with Energy Prices Act 2022. I will make sure that this is emailed to the hon. Member for Kilmarnock and Loudoun, as well, so that he can look at that.

[Sir John Whittingdale (Maldon) (Con)]

I think the hon. Member for Kilmarnock and Loudoun also wanted further details of how the alternative fuel payment might be distributed, particularly to those who, for instance, rely on heating oil. As Maldon has a number of people in the same position as those in Scotland, I would be grateful if the Minister included me in any additional information that her Department is able to supply.

[Ms Ghani]

I shall make sure that all the Committee members are copied into all correspondence that is circulated, so that they may be across all the information needed. It is best that we continue that in correspondence.

Let me touch on some of the issues raised. On data, I believe that the quote was “looks like”. Let me be clear: the intention is that the data can be used if required for the purposes of assessing the performance and effectiveness of the scheme, assurance, error checking, and the prevention, investigation, detection or prosecution of fraud. BEIS does not hold or process personal data such as name or address, or communication data such as email addresses, and the Government will ensure that the consumer’s privacy is safeguarded. Any changes to how consumer data is used will be communicated via the privacy notice, which is kept under regular review.

[Dr Whitehead]

Unfortunately, the privacy notice specifically requires that personalised data, including names, location, meter usage, amount of usage and habits of the person using the meter, be provided. That was in the privacy notice dated in early October and transferred to schedule 5 of the legislation in Northern Ireland, England, Scotland and Wales. That is what the Government are asking to be provided, and that is what I think is in breach of the framework.

[Ms Ghani]

I do not think it is correct that it is in breach, but I will make sure the hon. Gentleman is written to. The motivation is to ensure that, on a case-by-case basis, we tackle any consumers who are deliberately providing false meter readings, including business customers misrepresenting themselves as domestic customers. Those are the motivations behind this measure, but I will ensure that correspondence is shared so that accurate information is available.

A question was asked about fixed-term contracts and the duration of the scheme. All businesses on a non-domestic contract that are on an existing fixed-price contract that was agreed on or after 1 December 2021, people signing a new fixed-price contract, people on deemed, out-of-contract or variable tariffs, and people on flexible purchase, or similar contracts, will be eligible for support until the end of the scheme.

A point was made about the level of engagement and a meeting that took place with the Minister for Climate. I will ensure that any updates are provided in writing. I was not privy to that meeting, but it is good to know that Business, Energy and Industrial Strategy Ministers are making themselves available to all Members from across the House.

A question was asked about wider energy prices. The Energy Prices Act 2022 makes clear when various aspects of it can be used: namely, in response to the current energy situation or directly in relation to the Act. The vast majority of the powers in the Act are time-limited, including the powers to make regulations and any other decisions.

Fundamentally, the Government remain committed to ensuring that consumers receive help with the rising energy costs. These regulations are vital in ensuring that support is delivered this coming winter.

Question put and agreed to.

Resolved,

That the Committee has considered the Energy Bill Relief Scheme Regulations 2022 (S.I. 2022 No. 1100).

ENERGY PRICES (DOMESTIC SUPPLY) (NORTHERN IRELAND) REGULATIONS 2022

Resolved,

That the Committee has considered the Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022 (S.I. 2022, No. 1105). —(Ms Ghani.)

ENERGY BILL RELIEF SCHEME (NORTHERN IRELAND) REGULATIONS 2022

Resolved,

That the Committee has considered the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022 (S.I. 2022, No. 1106). —(Ms Ghani.)