The Parliamentary Under-Secretary of State for Energy Security and
Net Zero (Amanda Solloway) I beg to move, That the Alternative Fuel
Payment Pass-through Requirement (England and Wales and Scotland)
Regulations 2023, dated 19 February 2023, a copy of which was laid
before this House on 21 February, be approved. Mr Deputy Speaker
(Sir Roger Gale) With this we shall take the following motion: That
the Non-Domestic Alternative Fuel Payment Pass-through...Request free trial
The Parliamentary Under-Secretary of State for Energy Security
and Net Zero ()
I beg to move,
That the Alternative Fuel Payment Pass-through Requirement
(England and Wales and Scotland) Regulations 2023, dated 19
February 2023, a copy of which was laid before this House on 21
February, be approved.
Mr Deputy Speaker ( )
With this we shall take the following motion:
That the Non-Domestic Alternative Fuel Payment Pass-through
Requirement and Amendment Regulations 2023, dated 22 February
2023, a copy of which was laid before this House on 23 February,
be approved.
The instruments were laid between 11 January and 23 February
2023, and their purpose is to ensure that benefits from the
alternative fuel payment, both domestic and non-domestic, are
passed through to consumers. Throughout this winter, the
Government have delivered critical support to households,
businesses and other non-domestic consumers in response to the
unprecedented rise in energy prices. The Government brought
forward emergency legislation on energy support, paving the way
for this support package to be delivered rapidly across the
entire United Kingdom.
The alternative fuel payments scheme provides support to
households, organisations and businesses that do not use mains
gas and use alternative fuels such as heating oil. Eligible
domestic consumers using alternative fuels will receive a one-off
fixed payment of £200. Non-domestic consumers will receive
£150.
(Kilmarnock and Loudoun)
(SNP)
Can the Minister tell us how many households are still waiting to
access the £200 payment?
I thank the hon. Gentleman for that question. With his
permission, I will get back to him with the answer.
The pass-through requirement regulations are an important part of
the support package and of ensuring that support reaches those
who need it. The alternative fuel payment and non-domestic
alternative fuel payment pass-through schemes set out in the
regulations take the same approach as other energy schemes,
particularly the energy bills support scheme and the energy bill
relief scheme. They make it mandatory for intermediaries to pass
the financial benefit of the schemes through to end users, which
is necessary because that benefit is being delivered through
electricity suppliers. In some cases, a supplier will have a
contract with an intermediary such as a landlord or a heat
network rather than with the end user, so we need to ensure that
the support that it provides to the intermediary is passed on to
the end user in a fair way.
Let me clarify what I mean by “end user”. In the case of both the
alternative fuel payment and the non-domestic alternative fuel
payment, an end user is an individual who consumes energy and
pays for its usage through an intermediary such as a landlord. We
are talking about tenants of different types—they could be
domestic tenants, businesses or any kind of organisation.
Like other energy schemes, the schemes set out in the regulations
require that support be passed on in a “just and reasonable” way.
The regulations have been drafted in that way to account for the
many kinds of relationship between an intermediary and an end
user. If we used a narrow definition of “just and reasonable”, we
could run the risk of inadvertently excluding some intermediaries
from the pass-through requirements.
The regulations also accommodate scenarios in which there are
multiple end users to whom intermediaries pass on support. They
make it clear when and how intermediaries should communicate with
end users regarding the benefit that is being passed on.
Our approach to enforcement is consistent with the approach taken
in other energy schemes, particularly the energy bills support
scheme in Great Britain. If an intermediary does not pass on the
benefit to a user who is entitled to it, that user will be able
to pursue recovery of the benefit debt through civil proceedings.
Should a court rule in the end user’s favour, the end user will
be entitled to the payment plus interest at 2% above the Bank of
England base rate.
The Government have published guidance on gov.uk to ensure that
the requirements are clear to all parties. If necessary, there
are also template letters that tenants can use to contact their
landlords if they are concerned about their energy bills. The
Government are working with a wide range of stakeholders to
ensure that the pass-through regulations work for everybody in
scope, including vulnerable people and vulnerable groups.
(Orkney and Shetland)
(LD)
It is apparent from my constituency casework that there are
people who have already received the payment through their energy
company, but who probably should not have. I ask the Minister to
confirm on the Floor of the House what she has told me in
correspondence:
“Government will not require customers to repay an Alternative
Fuel Payment which they have received, even if they use
electricity to heat their homes.”
As the right hon. Gentleman will know, I am very new in post, so
I will check that point before I respond, if I may.
The regulations are vital to ensuring that support reaches the
people it is designed to help. They are essential to the
effectiveness of the alternative fuel payment in GB and the
non-domestic alternative fuel payment across the United Kingdom.
They will ensure that intermediaries pass on the support to those
who really need it: the households and non-domestic energy
customers most vulnerable to high energy costs. With all those
important reasons in mind, I commend the regulations to the
House.
7.29pm
(Southampton, Test)
(Lab)
As the Minister has said, these statutory instruments deal with
alternative fuel payments within the general scope of the
domestic energy price guarantee scheme and the non-domestic
energy bills support schemes. They deal specifically with
circumstances in which the customer does not hold a fuel account
directly with the supplier but, either domestically or
commercially, is able to secure assistance with energy costs by
ensuring that the saving is passed through from the supplier to
them. This applies to, for example, park home occupiers or, in
business cases, end users such as those who run cafés and guest
houses and are lessees of a landlord who pays the bills, and
receives the rebate, in the first instance. There will be
pass-through payments of £200 for domestic end users and £150 for
non-domestic end users. It should be noted that in Northern
Ireland alternative fuel payments have been combined with a main
payment of £600.
These latest SIs represent what I hope is the end of a long line
of provisions for various sub-categories of people for whom we
seem to have been legislating for a very long time. However, we
ought to note, at least in passing, that this has meant that
schemes that were announced in the autumn and were supposed to
run for six months are now in the last month of their operation,
and some people who should have received support are still
waiting for it six months after the scheme started. Lest there be
any doubt about that, I can tell the House that in February the
Government issued a press release headed “Households, businesses
and organisations off the gas grid to receive energy bill support
over the coming weeks”, which stated that:
“£200 payments for off grid households start today, while
businesses off the grid are expected to receive £150 payments by
10 March”,
which is in three days’ time. I therefore think that the inquiry
from the hon. Member for Kilmarnock and Loudoun () about who had not yet received
their payments is rather germane, given what the Government
themselves said about the long delays in releasing the
payments.
I appreciate that the support schemes have proved difficult to
administer, and that there have been repeated instances of new
sub-categories of people for whom separate secondary legislation
has been necessary to secure the integrity of the schemes, but
does the Minister really sit comfortably with the knowledge that
a not inconsiderable number of customers, both domestic and
non-domestic, did not receive help that was often desperately
needed for virtually the whole passage of the scheme itself, and
in some instances, as I have said, may not receive support until
the middle of the month?
We will not be opposing the SIs. Indeed, we want to see them
dispatched so that help, albeit late, can assuredly reach people,
particularly those who are relying on pass-through arrangements
for relief when they do not receive the up-front sums directly.
We are discussing these SIs because—as far as I can see—of
defects in the original pass-through SIs, which we have already
debated, as reported to the Government by the Joint Committee on
Statutory Instruments.
The Committee cited one particular defect in the Energy Bills
Support Scheme and Alternative Fuel Payment Pass-through
Requirement (Northern Ireland) Regulations 2023, which failed to
make it clear that support is to be delivered as a single rather
than a monthly payment. That has been corrected in the
Non-Domestic Alternative Fuel Payment Pass-through Requirement
and Amendment Regulations 2023. However, the Committee reported
on a second defect in the legislation which I think is
potentially serious: namely, the fact that there are requirements
in both pass-through SIs for the intermediary in the scheme to
notify the end user within 30 days of the provision of the scheme
benefit of how and when the pass-through will take place and what
amount will be passed through, and convey the important
information that the end user can recover amounts to which they
are entitled but do not receive as a civil debt.
All the information about how the end user can expect a
pass-through benefit should be contained in the information from
the intermediary. The Committee noted that no sanction is
attached to the provision to cover cases in which the
intermediary fails to inform the end user in that way. It seems
that the vital part of telling someone that they will receive the
benefit or can sue the intermediary if they do not receive it is
essentially a voluntary act for the intermediary to perform.
Yes, they should send the information, and yes, the legislation
says that they should, but if they do not, nothing will happen to
them, and unless the end user is aware of their entitlements,
they might remain in complete ignorance of an expected payment.
Thus, nothing will happen as far as a payment is concerned. This
is in spite of requirements being placed in the main legislation,
the Energy Prices Act 2022. Section 10(b) of that Act states that
regulations may make provision
“for the payment of a specified amount, on an application made in
accordance with the regulations by a person who is an end user of
an intermediary, where the intermediary fails to comply with a
requirement by virtue of subsection (9) to provide information to
the person”.
It is therefore clear in the main legislation what the secondary
legislation is intended to achieve.
The Government’s response to the information they received from
the Committee on this defect was to decide not to amend their
approach and effectively to ignore this provision in the Act.
They say so in the explanatory notes to this SI, and it is worth
putting the Government’s line of argument for ignoring the main
legislation on record. The explanatory notes state:
“Section 19(10)(b) of the Energy Prices Act 2022 provides that
pass-through regulations may require an intermediary who is in
breach of requirements to provide information to pay a specified
amount on application by the end user to a specified person. The
Department decided that the incentive for end users to make such
an application for payment would have been insufficient given the
time and administrative burden involved in doing so. However it
is still considered that there is merit in including notification
requirements in the instrument. This is on the basis that many
intermediaries would be likely to comply with the requirements
notwithstanding the lack of an enforcement mechanism.”
Frankly, that is a rather laughable defence for not doing in the
secondary legislation what the original Act said should be
done.
Is the Minister comfortable with this state of affairs where the
secondary legislation has written out a provision contained in
the primary legislation and potentially makes the receipt of
relief from bills much more capricious in the process? Does she
consider that there is arguably a case for action against the
Government by those deprived of the information to which they are
entitled on the grounds of negligence in doing their own
pass-through, which is to pass the requirements of primary
legislation into secondary legislation in such a way that it
reflects the primary provisions? Clearly these are not in
themselves grounds for chucking these SIs out on a vote, but
perhaps the Minister should consider, since she is clearly no
stranger to SIs, correcting the defects of previous SIs, and
consider whether there might be a case for a further correction
of these SIs to place the primary and secondary legislation on a
watertight footing.
7.37pm
(Kilmarnock and Loudoun)
(SNP)
It is quite incredible that we are debating these SIs in the main
Chamber today. They should never have been on the Floor of the
House. This is proof that, apart from othering asylum seekers,
this zombie Government are just padding out what would otherwise
be normal Government time. It is also ridiculous that, six months
down the line from announcing the energy support scheme, so many
people are unfortunately still waiting for the moneys they are
due. Can the Minister confirm whether these regulations and the
applications being opened up for the alternative payment will now
resolve the park home issue as has been long promised? For
clarity, will these regulations resolve that issue?
It would be good to know how many people are still waiting on
their moneys. Also, why do so many people have to jump through
hoops and apply for alternative fuel support? Why do people in
areas such as the highlands and islands, where there are many
more people off the gas grid than there are in Northern Ireland,
have to apply when every household in Northern Ireland gets the
£200 payment anyway? It is clear that people in the highlands and
islands of Scotland have fallen through the cracks, and the
Government should look at this again, especially if they are
going to repeat the scheme in future.
The first SI is about the pass-through of payments from the likes
of commercial landlords. Does the Minister know how many payments
are estimated to have been made to landlords that still have not
been passed on? As the shadow Minister, the hon. Member for
Southampton, Test (Dr Whitehead) said, the Joint Committee on
Statutory Instruments confirmed that the Government expect
information to be provided to them from these commercial
landlords, except that there is no enforcement mechanism. This is
a defective SI, yet despite that, the Government have chosen to
bring it back to the Floor of the House in the main Chamber and
do nothing about support or about changing the defects reported
by the Joint Committee. Have the Government considered any such
mechanism to allow the enforcement of information reporting? If
not, and if there is no way to enforce it, how can they assess
whether this support, this taxpayers’ money, is going to those
who need it, rather than being held up by intermediaries? This
money should be passed on to the people to whom it is rightfully
due.
The truth is that there is no incentive for commercial landlords
to report, even those who are doing the right thing in passing on
the money, because it is just time-wasting for them. Why should
they see any merit in reporting what they have done? That means
that, overall, the Government will not be able to assess the
scheme’s success in getting the money to those to whom it is
due.
The key question is, why is the onus being put on individuals to
pursue any moneys they are owed as a civil debt? In reality, how
many people know they can go to court to claim the £200 they
perhaps did not receive? Again, that is beyond most people’s
knowledge and ken.
Looking forward, as we come to the end of the initial energy
price guarantee scheme, and given that the Government have
borrowed a lot less money than they thought they would, they
really must look at reducing bills. Even holding bills at £2,500,
on average, is not enough because it would keep 6.5 million
households in fuel poverty. We are calling for a £500 reduction.
It is also critical that they review the support for small
businesses, which will receive an estimated £200 on average. That
is a drop in the ocean compared with their high energy bills. The
Government must look at that as we come to the new financial
year.
7.41pm
(Waveney) (Con)
I was not planning to speak in this short debate, so I will be
brief.
We have waited a long time for this statutory instrument. During
that time, many very vulnerable people have been suffering. I
acknowledge that, from the Government’s broad perspective, it is
a challenge to get this legislation right, but my concern, which
I hope my hon. Friend the Minister can allay, is that the
punishment for landlords—I am thinking in particular of some
rogue park home site owners—who do not pass on the money is, I
sense, puny rather than punitive. They will just laugh at the
punishment. I hope I am wrong, but I ask the Minister to take on
board my concern.
7.42pm
(Orkney and Shetland)
(LD)
I declare an interest, as my home is off grid. We are heated by
an oil-based central heating system, and I have received the £200
alternative fuel payment from my energy company, Octopus
Energy.
The Liberal Democrats support this scheme but, like others, we
have very serious concerns about the way in which it has been
constructed and implemented. I have liaised with the Minister
through correspondence and at Business questions last week on the
fact that a number of people whose homes are heated entirely by
electricity should not, on my reading of the regulations, have
been given the alternative fuel payment, but on the basis of the
modelling used by the Department, they have been given it. Others
in an identical situation will now have to make an application
through the portal that went live yesterday. If the Government
are to implement their own regulations, those applications will
be refused. That will leave us in the manifestly unfair situation
whereby, for two households in exactly the same situation, one
will be in receipt of the £200 payment and the other will not.
The Minister has already told me in correspondence that there are
no plans to claw back payments that have been made. That being
the case, what will be the remedy for those whose application
through the portal is refused?
I look at the information that has been put into the public
domain on the way in which tokens for people on prepayment meters
can be paid out, and I look at the information that has been
given to me by my own energy company, and they both say that the
tokens can be redeemed through PayPoint. That is true, but they
can also be obtained through the Post Office. Only a handful of
the outer islands in my constituency have access to PayPoint, but
people can go to their local post office. The information going
to the end energy user should surely reflect that.
One business in Orkney brought to my attention today the fact
that it will not, apparently, receive the payment because it
changed its energy supplier at the start of the year. It will not
get the payment from its new energy supplier or from its former
one, which, again, appears to be a fundamental unfairness.
The issue relating to district heating schemes does not affect
many communities, but it very much affects Lerwick, where
Shetland Heat, Energy & Power provides a district heating
scheme to many local households. It appears to us that they have
been excluded from the scheme. Will the Minister explain to us,
either now or in correspondence, why that should be the case?
The applications that are now having to be made by those who have
not received their payment automatically are to be done through
the portal. So will the Minister tell us how long it will take
for those people to be given a decision? In the event that they
are unhappy with the decision made, what will be their appeal
process? It is matter of record that there is a significant
overlap between homes that are off grid and those that have poor
or no internet access. A number of vulnerable elderly people just
do not use internet services at all, but there appears only to be
an online application process. Will the Minister explain to the
House why no offline process—no paper-based process—is in place
for that small number of people who remain highly vulnerable?
Finally, I turn to the issue of those who rely on solid
fuel—peat, coal or logs—for their heating. It is now apparent
that they will have to provide receipts. Those can go back to
September, but someone who has been buying coal at their shop,
perhaps in a small bag, every week since goodness knows when will
not have kept their receipts. How are those people, who have
incurred the expense, going to get access to this important
payment? It is arbitrary to say that solid fuel bought only after
September will be eligible for reimbursement. I know a lot of
people who will buy solid fuel in the summer months because it is
at its cheapest then. What will be done to ensure that those
people, who are now being told that they should have been keeping
the receipts from their weekly shopping since September, are not
going to be excluded?
Will the Minister tell us how many payments have already been
made? How many people will now have to make an application
through the portal? How many does the Department estimate will
remain off grid but will not receive a payment under this
scheme?
7.48pm
(Ceredigion) (PC)
It is a pleasure to follow the right hon. Member for Orkney and
Shetland (Mr Carmichael), because he raised a number of important
points and concerns echoed by many of my constituents. Ceredigion
is a mainland constituency that has one of the highest
proportions of domestic households not connected to the mains gas
grid—74% of properties are off grid there. Clearly, the scheme is
very welcome and will offer a great deal of support for many of
my constituents. However, the right hon. Gentleman drew upon a
few concerns that I share and would like to bring to the
Minister’s attention this evening, as I believe they warrant
urgent attention.
As the right hon. Gentleman said, those who have not received the
payments automatically are required to make an online
application. I have already been contacted, since yesterday, by
many constituents who have explained that although they are
eligible and satisfy most of the criteria, their applications
have been refused and they cannot proceed any further because
they have not got evidence that they bought fuel after September
2022. Many of these people will have bought oil in August or
July. I know and I am anticipating arguments that fuel was
slightly cheaper in those months than it would have been during
the winter months, and I do not deny that, but they were not to
know at the time that they would be punished for buying in
advance. They were not to know that if they bought in August, as
they often do, they would be at a disadvantage under this
scheme.
I cannot comprehend of a fair line of argument that the
Government could produce to satisfy me that some of my
constituents, who have been buying in the month of August for
decades in some cases, should be punished when their neighbours,
who perhaps were not able to buy in August—there were many
difficulties at the time— will receive a £200 payment. I would be
grateful if the Minister could satisfy the House that there will
be some discretion for people who bought in August. Although the
prices in August were cheaper than in the winter, they were still
significantly higher than prices in 2021 or 2020. The prices in
August 2022 were more than double those of August 2020. It is
important that individuals are not punished by an arbitrary
cut-off date for the online scheme.
If we need more arguments against the arbitrary cut-off date, it
is obvious that those who have received the payment automatically
may not have bought fuel after September 2022, but they will
benefit from the £200 because they have a direct relationship
with an electricity supplier. That is an unintended unfair
consequence of the scheme. I support the scheme, but that is a
hitch that needs to be addressed.
My other concern is that the postcode details of a number of
off-grid homes in Ceredigion were not supplied to energy
suppliers—for various reasons, mainly because they are new builds
or new estates—so they did not receive the payments
automatically. I am grateful to the Minister and the Department
for clarifying that those households are eligible for the
payments but that they will need to apply through the online
portal. The potential problem is that because they have a direct
relationship with an electricity supplier, they will have taken
it for granted that they would receive the payments
automatically. I am concerned that some people may not know that
they need to make an application through the online portal. Could
the Government initiate any steps, such as publicity campaigns,
to make sure that everyone who needs to make an application knows
that before the scheme concludes?
I echo the hon. Member for Kilmarnock and Loudoun () when he said that we need to
look ahead to next winter. The Government would do well to do the
work now to support off-grid homes in winter 2023-24.
7.52pm
With the leave of the House, I will respond to the debate.
I thank my hon. Friends and other Members for their valuable
contributions tonight. I will send on some information about some
of the figures that I am unable to give at the moment. The
regulations are necessary to ensure that we implement the
alternative fuel payment scheme, in Great Britain, and the
non-domestic alternative fuel payment scheme by allowing support
to reach those who need it, and I think we all agree with that.
The schemes are already in place and are delivering support to
organisations across the United Kingdom.
As we are all aware, the domestic alternative fuel payment scheme
is delivering £200 to households that use alternative fuels such
as heating oil, liquified petroleum gas, coal or biomass, helping
some 2 million off-grid households to meet their energy costs
this winter. The scheme particularly supports households in rural
areas that are not connected to the gas grid. Support was doubled
to £200 in the autumn statement to reflect the price rises facing
people using alternative fuels in their houses. The vast majority
of eligible households should have received the payment
automatically via their electricity supplier in February.
The non-domestic alternative fuel payment is delivering £150 to
non-domestic customers who use alternative fuels for heating,
helping premises in Great Britain and Northern Ireland meet their
energy costs this winter.
(Central Suffolk and North Ipswich) (Con)
I want to pick up the point about park homes and site owners and
ask the Minister to address that specific point in her closing
remarks. There are concerns that site owners are not always
passing on the benefit of this payment to the residents of park
homes. I would like some reassurance that there are proper
measures in place and penalties that will make a difference in
ensuring that site owners pass the benefit of these payments on
to residents.
I will address that in a moment. As I was saying, the scheme
supports a wide range of domestic and non-domestic customers,
including businesses, schools, hospitals and churches that are
not connected to the gas grid. It will also deliver a top-up
payment to the highest users of kerosene heating oil. Most
eligible non-domestic customers should receive their £150 payment
automatically in March, and we continue to update and publicise
our guidance on the gov.uk website to ensure that energy users
and intermediaries understand their rights and obligations.
I turn now to a couple of other questions that have been
raised—as I have said, if I do not address any of the questions
that have been asked, I will write to hon. Members. One thing I
can confirm is that the Government will not require customers to
repay an alternative fuel payment that they have received, even
if they use electricity to heat their house.
Thinking about how to ensure that energy users know how to make
necessary claims, end users can recover claims to pass-through
amounts as civil debts in the county courts, in the same way that
other outstanding amounts owed to an individual can be claimed.
However, for future pass-through requirements, we will be keeping
ahead of that position and making sure that we review it on a
constant basis. We have reflected on advice we have received
regarding previous pass-through regulations and meaningfully
engaged with stakeholders across the United Kingdom to promote
and disseminate requirements for all the schemes. That includes
working side by side with delivery partners such as utility
regulators and energy suppliers, and key stakeholders including
consumer ombudsman services.
We considered introducing sanctions on intermediaries if they
failed to notify the end user of their rights. However, we
decided that the incentive for end users to make an application
for sanctions to be applied would be insufficient, given the time
and the administrative burden involved in doing so. None the
less, notification requirements were included in the statutory
instruments, on the basis that many intermediaries are likely to
comply with the requirements set out and that the published
guidance clarifies the contents of this obligation. Furthermore,
it was considered important to ensure consistency in approach
across the pass-through regulations of all energy support
schemes.
We will continue to seek views and feedback from those impacted
by all these regulations, as well as from key delivery partners.
I commend the regulations to the House.
Question put and agreed to.
Resolved,
That the Alternative Fuel Payment Pass-through Requirement
(England and Wales and Scotland) Regulations 2023, dated 19
February 2023, a copy of which was laid before this House on 21
February, be approved.
Energy
Resolved,
That the Non-Domestic Alternative Fuel Payment Pass-through
Requirement and Amendment Regulations 2023, dated 22 February
2023, a copy of which was laid before this House on 23 February,
be approved.—(.)
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