Draft Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024
Draft Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023
(2 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Robbie Moore)
I beg to move,
That the Committee has considered the draft Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024.
The Chair
With this it will be convenient to consider the draft Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023.
Robbie Moore
Laid in draft before the House on 17 January, the regulations amend the Packaging Waste (Data Reporting) (England) Regulations 2023. Since June last year, when those regulations were first amended, there have been developments in the collection and packaging reforms, including a 12-month deferral of the full implementation of the packaging extended producer responsibility scheme, to focus on stakeholder engagement, and a delay to the Scottish deposit return scheme. Those events have caused several issues that now require amendments to producers’ data reporting obligations.
Let me turn to the details of the first statutory instrument. The regulations introduce two key changes, but I assure the Committee from the outset that the changes being introduced are not a change of policy intent; instead, they address the delay to the Scottish DRS and stakeholder concerns. First, the SI removes the exemption from data reporting on drinks containers that would have been obligated in a Scottish DRS. The delay to that scheme, combined with the exemption from the data reporting regulations, meant that 180,000 tonnes of packaging would have gone unobligated for a number of years under both the DRS and the EPR. The amendment accounts for the development and ensures that all packaging supplied in the UK will attract a recycling obligation. The new provisions will exempt this material again once a DRS is operational.
Secondly, the SI makes changes that address stakeholder feedback on the definition of household packaging. The amendments address two key aspects, which broaden the definition to allow for more packaging to be exempt from disposal fees. The first is where packaging or a packaged product is designed to be used only by a business. An example would be a 50-litre beer keg. Under the current definition, if the beer keg is sold to a wholesaler before being supplied to the pub that uses it, the packaging would have to be reported as household packaging. However, large beer kegs are unlikely to end up in household bins. Our amendments introduce an additional test, which offers producers the opportunity to exempt such packaging from being treated as household packaging.
The second change widens that business-only exemption to include packaging or a packaged product that is supplied to public institutions, such as hospitals or schools, that is unlikely to end up being disposed of in a household bin—for example, packaging for an ultrasound scanner or restricted medicines. The amendments allow for more packaging to be fairly exempted from being defined as household packaging and therefore not attract packaging EPR disposal cost fees. However, all packaging will remain subject to packaging EPR recycling obligations through the purchase of packaging recycling evidence notes from re-processors and exporters, as it is at present.
In addition to the two key changes that I have discussed, the regulations make a number of other changes. Four of the amendments were identified not long after the original regulations came into force in early 2023. We were not able to include them in the amendments midway through the 2023 data collection year as they would have retrospectively increased the obligations. We always intended to make the changes starting from the 2024 reporting year.
The first change clarifies that the packer or filler is obligated for branded packaging if the only brand on the packaging relates to the packaging itself and not the product inside. For example, if a packer puts their product in a branded Jiffy bag but does not add their own brand to it, the packer is obligated, not Jiffy.
The second change makes it clear that where ownership for imported packaging remains with an overseas producer until it is passed to the client by a third party—or a toll manufacturer—the first person to take ownership in the UK is obligated for that packaging. This could be a supermarket or wholesaler. The amendment ensures that such packaging does not go unobligated.
The third change addresses a loophole to ensure that distributor producers retain their obligations where they sell empty packaging to large producers who then sell that packaging onwards without filling it. For example, this could be a wholesaler that sells unfilled cups to small, independent coffee shops.
The fourth change is an amendment to the seller obligation. The regulations already require reporting by nation of packaging sold from a business to a consumer. The fix in the regulations will ensure that data is also reported on the nation in which packaging is sold from one business to another business. This was always the intention, and will help to enable the tracking of recycling rates in each nation individually.
In addition, we are making an amendment that will aid distributor producers in complying with the regulations in advance of the main packaging extended producer responsibility regulations coming into force later this year. It does this by placing an obligation on the Environment Agency to publish a list of all large producers that have reported data, thereby supporting them in identifying which of their customers are obligated producers in their own right.
Finally, the SI includes some minor amendments to correct the drafting, some provisions to accommodate the transition from the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, and some changes to help to avoid the reporting on one piece of packaging by two producers. The amending regulations will apply to England only, but similar amending regulations are being progressed in Wales, Scotland and Northern Ireland. My officials have worked closely with the relevant Departments in the devolved Administrations on the development of this legislation.
I turn now to the draft Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023, which were laid before the House on 10 January this year. Litter and fly-tipping harm the environment and blight our communities. We want to see councils making the most of their enforcement powers, including by issuing fixed penalty notices to those who litter, fly-tip or pass their household waste to someone without the proper licence. Income from such fines is retained by councils and is currently ringfenced for various functions related to waste management, including sweeping, emptying bins and household waste collection. We know, however, that in a minority of councils fixed penalty receipts are absorbed into general council budgets or spent on other neighbourhood functions.
The Government believe that the revenue received through the payment of such penalties should be reinvested into expanding or improving councils’ enforcement functions and cleaning up the consequences of this antisocial behaviour. The statutory instrument achieves this goal by amending the qualifying functions on which councils can spend income from such penalties to cover enforcement and clean-up only. By improving their enforcement capabilities, councils should be able to catch more perpetrators and deter others from offending, which should lead to cleaner streets, parks and countryside. Enforcement functions could include employing more officers, investing in CCTV and signage, and improving the use of data. Clean-up functions can include collecting and disposing of litter and fly-tipping and restoring land that has been harmed.
The statutory instrument retains the ability of the Secretary of State to make provisions by future legislation about how local authorities in England use their fixed penalty receipts. Although the new ringfence will apply to councils in England only, the instrument does include consequential amendments relevant to Wales to ensure that no changes are made to how local authorities in Wales can spend fixed penalty receipts.
The statutory instrument also makes consequential amendments to the Local Government (Structural Changes) (Further Transitional Arrangements and Staffing) Regulations 2009 to ensure that arrangements pertaining to the merging of authorities in England are not affected. Consequential amendments are also made to the Littering From Vehicles Outside London (Keepers: Civil Penalties) Regulations 2018, meaning that no changes are made to how authorities can spend income from the relevant civil penalties.
To conclude, I emphasise that the measures in the first statutory instrument are crucial for enabling the effective implementation of the extended producer responsibility for packaging and realising its associated environmental benefits. The regulations in the second instrument will drive councils in England to reinvest more income from fixed penalty receipts from litter and fly-tipping into enforcement, thereby catching more offenders and keeping our communities clean. I commend the draft regulations to the Committee.
Ruth Jones (Newport West) (Lab)
It is a pleasure to serve under your chairmanship today, Dame Maria. It is a wonderful start to the day to be talking waste with the Minister. I reassure the Minister and the Whips that, given the technical and relatively uncontroversial nature of this legislation, we do not intend to press it to a vote.
But before everyone breathes a sigh of relief, I have a few remarks to make. I want to be very clear that His Majesty’s Opposition are on the side of, and support, all measures that are aimed at promoting the better use of our natural resources and increasing reuse and recycling. Establishing the correct base data will be fundamental to the success of the extended producer responsibility scheme for packaging.
I note the important progress on recycling made by my colleagues in the Welsh Labour Government. Welsh recycling rates have now reached 65.7%, with the aim to get to at least 70% in 2024-25. That has already been met by five Welsh local authorities. In Wales, we have also now recorded the lowest ever amount of waste sent to landfill, at just 1.6%. I pay tribute to the fantastic work being done in my local communities to save usable items from landfill, by organisations such as Re:Make Newport and Wastesavers.
It is a shame that England is lagging so far behind. The lack of progress is also causing huge unnecessary costs and holding back business investment. Having made that point about landfill, and I think about all the places across England—from Hull to Newcastle-under-Lyme to Greater Manchester—where landfill sites continue to blight the lives of women, men and children of all ages and from all backgrounds.
I will take each SI in turn and then make some short concluding remarks. First, the draft Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024 are needed partly because of the Government’s failure, to date, to deliver an agreed way forward for the UK’s deposit return scheme, which was promised in 2018. With the Prime Minister picking a fight with the Scottish Government, we have heard from business that the DRS industry forum has now been placed in a position of postponement, with neither the January nor February meetings taking place this year. There has even been press speculation that the scheme will now be delayed until 2028.
Maybe this is just another case of the Conservatives giving up on governing because it is all too difficult? Well, the Minister will not be surprised to know my views: if they do not want to govern, they should get out of the way and let us in. Will the Minister confirm when the Government will bring in a UK-wide DRS, and when the DRS industry forum will next meet?
Meanwhile, the draft regulations will place a significant reporting burden on business, especially with the inclusion of DRS materials as part of the EPR. Will the Minister clarify whether that means that the costs of collecting and recycling drinks containers will fall to non-drinks packaging producers through EPR fees? I listened carefully to what he said, but I am still not clear whether that will happen.
Although regulations on data reporting have been introduced, the wider regulatory package for the Department’s EPR scheme for packaging remains a work in progress and shrouded in mystery. There is no clear timeline or indicative fees, which industry was told to expect at the beginning of January. Does the Minister accept that without indicative modulated fees, businesses are unable to budget and prepare for the introduction of EPR?
The lack of clarity and continual delay is a huge barrier to the investment and planning that we need from industry to design and roll out the packaging of the future, which must be far more reusable and recyclable. The question is about whether the draft regulations will lead to more or less recycled material. Will they encourage or discourage the refill and reuse of containers? What about retailer packaging take-back schemes? Overall, will they reduce greenhouse gas emissions?
We have heard from the all-party parliamentary group on sustainable resource that the draft regulations could actually disincentivise refillable packaging. The APPG has put forward several recommendations to enhance the EPR’s effectiveness in facilitating and accelerating reuse, including the setting of fees at a level that will promote design for reuse and provide incentives for reuse infrastructure. Will the Minister confirm that those measures will be part of the wider EPR regulatory framework?
The Department’s plans are far from transparent, whether for industry, English local government or the devolved Governments in Scotland, Wales and Northern Ireland. Instead of building confidence in fair charging for industry and a fair allocation of proceeds across waste authorities, there seems to be suspicion that the UK Government are trying to manipulate the finances to mask inadequate funding. When will the complete packaging EPR regulatory framework be available for industry and local authorities?
I have some further specific questions on which industry needs answers sooner rather than later. In our meetings with industry representatives, they are focused on these questions, because they cannot plan for the future unless they know the answers. How much packaging has been declared as placed on the UK market by those producers that have reported data to the new EPR system? How does that compare to the tonnage the Department expected to be declared?
What penalties will be incurred by producers that fail to submit their EPR data by 31 May? Will the penalties reflect the size of turnover or the size of the recycling obligation of an offending producer? New regulation 7A of the data reporting regulations refers to Environment Agency guidance on the definition of household packaging; when will that guidance be available to producers? It is very difficult to devise a scheme without having the guidelines.
Five years since the Government’s 2018 waste strategy stated that the current packaging waste rules lacked transparency and did not
“sufficiently incentivise design for greater reuse or recyclability”,
what is the timetable for phasing out the packaging recovery notes system? What preparations are being made to reduce undue burdens on businesses? Finally, will the Minister explain how EPR will work for franchise businesses, as the British Retail Consortium has written to ask the Minister to allow franchisors to register, report and be charged on behalf of franchisees?
On the draft Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023, I understand that their aim is to more tightly ringfence the use of income by local authorities, as the Minister said. Will he outline how much has been received in fixed penalties and what local authorities have spent it on? How does the amount that local authorities received in fixed penalties compare with the amount they spend on street cleaning and dealing with fly-tipping? A limited consultation was undertaken with local authorities, but no responses from the west midlands were included; does the Minister know why?
Adequate and long-term funding is crucial for councils to effectively prosecute fly-tippers, develop litter strategies and implement best practice, but councils are facing financial challenges in prosecuting fly-tippers, with the fines issued by courts often lower than civil penalties. Will the Minister work with the Local Government Association to remove the cap on fixed penalty notices for fly-tipping, littering and graffiti? Has he had any discussions with the LGA to date? Will he work with the LGA to explore how more stringent court fines for the worst offenders could help councils to investigate and prosecute fly-tippers and deter repeat offenders?
A few weeks ago in a Westminster Hall debate, my hon. Friend the Member for Croydon Central (Sarah Jones) drew attention to the dangers of fly-tipping, including the feeling of dirtiness and neglect that it causes, damaging small businesses, cafes, grocers and hairdressers. She was right to say:
“Clean streets tell us that we are part of a community and that people take pride in the spaces they share, the memories they make there and the community they are part of.”—[Official Report, 6 February 2024; Vol. 745, c. 21WH.]
Neighbourhoods across England are getting buried under an avalanche of litter and dumped rubbish, leaving communities feeling broken and powerless. In 2022-23, local authorities in England had to deal with more than 1 million incidents—that is nearly 3,000 a day. Will the Minister confirm whether the draft regulations will allow councils to use fixed penalty funds to avoid having to close recycling centres, to provide free mega-skip days and to put up CCTV at fly-tipping hotspots?
Finally, when will we see the Government’s promised action on single-use vapes, 1.3 million of which are thrown away every week? I accept that I have asked lots of questions, but the Minister will appreciate that governing by statutory instrument will land us all in this situation. If he and his Parliamentary Private Secretary, the hon. Member for West Dorset, have not had time to scribble down all my questions, or the Minister cannot answer them now, I will happily put them in writing, but I wanted to give him a go at answering them today. The Opposition will not oppose the regulations but we want answers to those obvious and important questions.
Robbie Moore
I thank the hon. Member for Newport West for her valuable contribution to the debate. Let me address some of her points and comment on the questions that have been raised.
The first SI makes amendments that will significantly extend the household packaging exemption, but we appreciate that more work may need to be done to make it go further. In developing the definition we have reviewed and engaged heavily with stakeholders, and taken into account the established schemes that have been introduced in other countries. We are not only making sure that this legislation is rolled out here, but working closely in conjunction with the devolved Administrations before the main SI is laid before this House by the UK Government. We are also working closely with stakeholders to ensure that the definition aligns with the policy aims and needs of the sector, while balancing the requirement to create an approach that is both enforceable and fair to local authorities.
The hon. Lady asked why the SI is necessary. It includes important amendments that take account of the deferral of the packaging EPR and the delay of the Scottish deposit return scheme. The amendments also take account of feedback. We have listened to stakeholders throughout the 2023 consultation and other engagement. Not making the amendments would result in, among other things, the Scottish DRS material being unfairly obligated; double reporting by producers; and packaging being classified as household packaging where evidence to the contrary is easily available. That is why the SI is necessary.
On timing, it is understandable that producers are keen to get clarity on fees. Under the extended producer responsibility packaging regulations, producer fee rates will be set and published by the scheme administrator. The fee rates for the 2025-26 financial year will not be known until the spring of 2025, once all the producer packaging data has been received and checked. However, in the meantime, to support producers, we aim to produce illustrative fees as soon as possible.
On the risk of significant non-compliance by producers, I assure the hon. Lady and all Members that we are doing all we can to make sure that producers that are obligated to comply with the regulations are in the best position to do so. We have a comprehensive programme of engagement that is reaching out to more than 10,000 organisations through webinars and newsletters. In addition, we have published guidance on the gov.uk website.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
I am particularly pleased that my hon. Friend is tackling fly-tipping, which my constituents have raised with me as a problem, as well as dealing with people dropping litter. What does he expect it to cost businesses to comply with the packaging regulations? Does he expect that to put prices up?
Robbie Moore
As I have said, we want to put businesses in the best position possible to have an understanding of the fees that are likely to be imposed on them. That is why we aim to give out indicative fees to businesses later this year, so that they can encompass them within their business models. It will be up to them to consider how that will impact any consumer when rolled out. As a Government, we aim to get the indicative fees out to industry as soon as possible so that they can best forward plan.
The hon. Member for Newport West referred to modulated fees. We are in the process of reviewing and collating the evidence we collected in the autumn of 2023 on the 13 broad types of packaging that will be shortlisted for higher fees, and we will engage further with stakeholders on that topic in the second half of 2024.
Ruth Jones
I understand that the Minister is talking about preparation, but industry needs certainty and clarity now; it cannot talk about things now and then put them into place with just a couple of months’ notice. When will the DRS industry forum next meet? When will the complete packaging EPR framework be available for industry and local authorities?
Robbie Moore
I will come to the DRS shortly. We engage with industry constantly on EPR and, as I said, we are aiming to get the indicative fee structure out as soon as possible. On modulated fees, we have ongoing engagement with the sector and aim to provide further clarity in the first half of this year.
The hon. Lady asked about reusable and refillable packaging. Following feedback from stakeholders, we have decided that the initial focus of the packaging EPR will be to encourage the greater use of recyclable packaging and to complete the work of putting in place a cost-effective and efficient recycling system to ensure that recyclable packaging is recycled. Further obligations are to be introduced on the use of reusable packaging, in which all producers will be encouraged to get involved and engaged.
Before I move on to the DRS, I know that the hon. Lady asked about support for councils. From 2025, the extended producer responsibility for packaging will move the full cost of dealing with household packaging waste that is generated by households from local authorities to the businesses that handle and use packaging, applying the “polluter pays” principle. Once the packaging EPR is fully operational, the shift of cost from local authorities to producers is estimated to be in the order of £1.2 billion per year across local authorities in the UK.
The implementation of the DRS will be rolled out, and we are listening to and continue to work with industry to assess the feasibility of the implementation date as more detail on the implementation phases of the scheme is developed. I stress that it is incredibly important that we get the complete interoperability of the deposit return scheme across all nations. That work and those conversations are currently happening with the devolved Administrations.
Ruth Jones
The Minister is generous to give way again. He has talked up interoperability, which is crucial —we do not want glass bottles going one way across the border and plastic bottles going across the Scottish border—but when will it happen? The rumour is that it will be 2028; will the Minister confirm or deny that?
Robbie Moore
I will not get involved in commenting on rumours, but I can say that the announcement will be made shortly.
In May 2023, the UK Government published a position statement setting out that the deposit return scheme across the UK should be interoperable to reduce the complexity for businesses and consumers. That is key because not only does the scheme need to be completely interoperable but we need to bring consumers along with us. If a DRS scheme is to be completely operational and have the influence and impact that we as a Government want it to have, we have to bring consumers along with us, which is where we are focusing our efforts before we make any further announcements. The Department for Environment, Food and Rural Affairs is working closely and at pace with the devolved Administrations on the next steps to deliver interoperable schemes across the UK. As I say, we aim to provide more clarity on that shortly.
Let me turn to the second SI, on waste enforcement. As referred to in the anti-social behaviour action plan, the Prime Minister has made it clear that councils should take a tougher approach to enforcement and make greater use of fixed penalties. The maximum fixed penalty that councils can issue has been increased from £400 to £1,000 for fly-tipping, from £150 to £500 for littering, and from £400 to £600 for householders using an unlicensed waste carrier. I reassure the hon. Member for Newport West that the Government have published new league tables to provide transparency on how councils are using their fly-tipping enforcement powers.
As I outlined, the statutory instrument will help to drive up more income from fixed penalty receipts, which will go into the building of enforcement capability and capacity in English councils, meaning that more offenders are brought to justice. As we all know, fly-tipping is a serious crime and offenders can face significant fines and imprisonment if they are convicted in court. DEFRA is working at pace on the issue. In 2021, the National Fly-Tipping Prevention Group produced a guide on how councils and others can build robust cases for prosecutions. The average court fine has increased by 12%.
On the hon. Lady’s question about litter and fly-tipping fining for profit, fixed penalty notices should never be used to raise revenue, or to punish accidental littering or those who are trying to do the right thing, when education would be a better approach. The new, tighter ringfence will send a clear message to councils and members of the public that the penalties are not a moneymaking tool for councils, but rather a tool to help them to protect public spaces. We will provide statutory guidance on the use of litter penalties and will consider including advisory statements on fly-tipping.
To conclude, I hope that I have covered most of, if not all, the points raised—
Ruth Jones
The Minister is being very generous with his time. I do realise that I asked a lot of questions; would it be easier for me to write to him on certain things such as when the DRS industry forum will next meet?
Robbie Moore
I am more than happy to receive correspondence from all Members of this House, and will of course provide the response to any questions raised. I am happy to receive any questions in writing.
To conclude, I trust that Committee members understand and accept the need for the two statutory instruments, the first of which will make crucial changes to the Packaging Waste (Data Reporting) (England) Regulations 2023 that will ensure that drinks containers that are supplied in Scotland pick up an obligation in the same way that drinks containers supplied elsewhere do. The amendments will also widen the provisions that allow for some primary and shipment packaging to become exempt from being defined as household packaging. Finally, further amendments made through the regulations will provide clarification on producer reporting.
The second statutory instrument will drive councils in England to reinvest more income from fixed penalty receipts from litter and fly-tipping into enforcement, thereby catching more offenders and keeping our communities clean. I thank Members for their contributions and support. I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024.
DRAFT WASTE ENFORCEMENT (FIXED PENALTY RECEIPTS) (AMENDMENT) (ENGLAND AND WALES) REGULATIONS 2023
Resolved,
That the Committee has considered the draft Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023.—(Robbie Moore.)
Draft Representation of the People (Variation of Election Expenses and Exclusions) Regulations 2024
(2 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Simon Hoare)
I beg to move,
That the Committee has considered the draft Representation of the People (Variation of Election Expenses and Exclusions) Regulations 2024.
It is a pleasure, Dame Angela, to serve under your chairmanship.
The draft regulations uprate the maximum campaign spending limits for Greater London Authority and local authority mayoral elections in England to reflect the changes to the value of money. This statutory instrument also provides an exclusion for reasonable security expenses—an issue which I think requires no further amplification from me—from various election campaign spending limits. Finally, the draft regulations make some technical amendments to remove drafting that is now redundant from the Police and Crime Commissioner Elections Order 2012.
Elections rely on the ability of political parties, candidates and other campaigners to communicate their views so that voters may make an informed decision at the ballot box. If approved by Parliament, this draft statutory instrument completes the package of reforms that the Government announced in July 2023 to uprate reserved and accepted party and candidate spending limits and donation thresholds. This is a necessary action, as many of the statutory limits, which are set in absolute terms, have not been uprated in recent times. If we do not uprate them in line with inflation, it means that they continue to be lower in real terms, which has a real impact on campaigning.
Furthermore, no one should feel afraid to participate in our democracy. In the past eight years, we have witnessed, as we all too horribly remember, murders of two colleagues, Jo Cox and David Amess. The safety of parliamentarians and candidates is important and, in recent years, the Government have introduced numerous measures to tackle intimidation in public life. It is of the utmost importance that candidates feel safe to campaign. The Government are therefore explicitly exempting reasonable security expenses from contributing to spending limits for political parties, candidates and other campaigners at reserved and excepted UK elections. I am pleased to confirm that this fulfils a recommendation made by the Jo Cox Civility Commission in its recent report, “No place in politics: tackling abuse and intimidation.” I am sure that the whole Committee will welcome that response.
Turning to specifics, the draft regulations will uprate the spending limits for candidates at GLA elections and local authority mayoral elections. The various spending limits for GLA elections have remained unchanged since they were set in 2000. Due to such a significant gap, the regulations will uprate the spending limits by 81.05%. That means that the limits for a candidate at an election for the Mayor of London will increase from £420,000 to £760,410; the limits for a candidate at an election of a constituency member of the London Assembly will increase from £35,000 to £63,360; and for an individual or party list candidate at the London-wide Assembly election, the limits will change from £330,000 to £597,460.
The draft regulations will also uprate the spending limits for local authority mayoral elections in England by 29.09%. The uprating is done from 2017 to align with the new spending limits for combined authority and combined county authority mayoral elections, recently approved by Parliament in the Combined Authorities (Mayoral Elections) Order 2017 (Amendment) Regulations 2024. This is to ensure parity between mayoralties, and it means that the limits for local authority mayoral elections in England will change from £2,362.059 per elector to £3,040.08 per elector.
The draft regulations will provide clarity for parties, candidates and campaigners, as I say, by explicitly exempting reasonable security expenses from contributing to the spending limits for candidates, political parties and third-party campaigners at UK reserved and excepted elections, other than local government elections in Northern Ireland. The Government will introduce an equivalent exemption for local elections in Northern Ireland in due course. The regulations will not apply to security expenses at devolved elections in Scotland and Wales. The Scottish Government have separately legislated to make similar provision and the Welsh Government have recently consulted on doing so as well.
Many parties and candidates already take the view that security expenses are, in general, not election expenses. This exemption will put that view beyond any doubt and ensure that campaign spending limits are not a barrier to provision of security during election campaigns. I thank the Electoral Commission for drawing the Government’s attention to this point of law and for its support in getting the drafting of this important exemption right.
The draft regulations make minor technical and consequential changes to remove police areas of Greater Manchester, North Yorkshire and West Yorkshire from the Police and Crime Commissioner Elections Order 2012. [Interruption.] At the very mention of West Yorkshire, the hon. Member for Leeds North West arrives in Committee, and he is most welcome.
Those functions have been transferred to the relevant Mayors by separate legislation, so these regulations do not make a substantive policy change. They simply remove the redundant drafting from the 2012 order to ensure that the law accurately reflects that position.
Before uprating election spending limits, the Government consulted the members of the Parliamentary Parties Panel on two occasions. The parties were first consulted in 2020 ahead of uprating spending limits for candidates at local elections in England. In September 2022, the Government wrote to the members of the Parliamentary Parties Panel again regarding uprating election spending limits and exempting reasonable security expenses from those limits. The responses received indicated support for increasing various spending limits and also endorsed exempting security expenses. As is statutorily required, the Electoral Commission was formally consulted on this statutory instrument.
In conclusion, the uprating of campaign spending limits at GLA and local authority mayoral elections in England to reflect inflation is necessary. The significant gap since the limits were last set and the current high level of inflation mean that the uprating exercise is required to avoid the spending limits putting greater constraints on campaigners than originally intended.
I am sure I speak for the whole Committee when I say that violence and intimidation cannot and will not be tolerated and have absolutely no place in our public and democratic life. The security expenses exemption will bring clarity and reassurance for parties, candidates, third parties and those who enforce the rules as to their ability to incur security expenses without it impacting on their overall spending limits.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
It is a pleasure to serve under your chairship, Dame Angela. I thank the Minister for his introduction to this statutory instrument. I agree with him that violence and intimidation have no place in our democracy. As we prepare to celebrate International Women’s Day, we remember, sadly, the level of abuse that a number of female parliamentary candidates and colleagues face. We stand united in calling out any form of abuse.
I start with some good news for the Minister, as we support the implementation of regulation 4 of the instrument. It would be wrong for expenses incurred to protect candidates, their families and supporters to be seen as part of the cost of campaigning. It would set a dangerous precedent if candidates requiring extra security had to forgo elements of their campaign simply to feel safe.
These exclusions should not mean that it becomes the norm that candidates are expected to pay even more to fight an election because they do not feel safe. This instrument stops an obvious injustice in our electoral expense law, but our response to candidates feeling unsafe cannot simply be to tell them to open their pockets and hire security. The Government must make sure that adequate resources are in place to ensure that candidates feel secure without needing to spend their own money.
The Minister mentioned his discussions with the Electoral Commission, which I welcome. I would also welcome assurances from him that there have been conversations with the Electoral Commission on guidance. For example, when are expenses reasonably attributable to security when someone tasked with security simultaneously carries out tasks that would come under election expenses? There could be a blurred line there.
Another significant part of the instrument concerns the increase to election expenses in Greater London Authority elections and local authority mayoral elections. As the Minister outlined, the figure for mayoral elections dates back to when the role was introduced in 2000. Since then, sadly, that figure has failed to be updated in line with inflation, and it was used during the last mayoral election, 21 years after it was introduced. I understand that a significant increase is expected, given that the limit has been untouched for 24 years. I hope that the Minister recognises why we need to ask questions about why we are raising the limit by over 80% just two months out from the elections. The reality is that we have seen a huge rise in inflation under this Government. If we look at the £340,000 increase in the mayoral candidacy budget in London in this SI, nearly £250,000 is accounted for because of inflation. The last four years alone have accounted for a massive £132,000 of the increase.
I am sure that the Minister will not want to enter into an argument about compound interest, but the real reason we are seeing this rise in the proposed figures is the compound failure by successive Tory Chancellors to get inflation under control. If we apply that to other things, we see other areas across the country with skyrocketing inflation, whether that is the price of basic essentials or the cost of mortgages—there are so many things. No one can pull a magic lever to bring these costs down, to accommodate the massive increase in inflation. People have had to cut costs and lower their standard of living to accommodate that, but the Government can raise the limits for election spending by over 80% at the drop of a hat.
We do not intend to oppose this instrument outright, as I said, but I hope that the Minister will agree that this rise does not reflect the reality that people are seeing in their day-to-day expenses. I hope that he also agrees with me that future Governments should not wait until two months before an election to carry out an increase that is 24 years late.
Simon Hoare
I am grateful to the hon. Lady for her in-principle support for this measure and for her general approach to the issue. With regards to timing, this is the fourth of a quartet of SIs dealing with these matters. The Government will of course always strive to meet the Gould principle: we aim to comply with the principle wherever possible. This was a judgment call. I will be perfectly frank with the hon. Lady and with the Committee: we could have delayed this until after the elections in May. We took the view that, given the need for clarity on security and on upgrading, it was better to do it now. I take entirely the point that she made that it is relatively close to May to make the decision, but I took it in good faith, believing it to be helpful to candidates, particularly on security.
As for how the guidance on expenses will be dealt with, these things have to be done in a sensible and prudent way. Given the temperature of some of our political discourse in this country, I am tempted to say that security issues trump all, and the Electoral Commission and others who inspect candidates’ returns will take that into account. That is not an excuse to defray other campaigning costs under the banner of security. To do so would not only be wrong; it would also be deeply dangerous and offensive to those whose memory I mentioned in my opening remarks, and to others. The hon. Lady was right to point to the spirit of International Women’s Day and the disproportionate amount of abuse that female politicians receive, irrespective of party. We would do well to bear that in mind.
As my right hon. Friend the Prime Minister said on Friday outside Downing Street, our democracy feels slightly under threat. The defending democracy taskforce, which I sit on with my right hon. Friend the Minister for Security is bringing together a whole raft of agencies and involved parties to ensure that everybody who takes part in our democratic life, whether they are a deliverer, campaigner, door knocker, putter-up of posters, candidate, candidate’s agent, a member of a candidate’s family or whoever, feels safe and secure in fulfilling that important role. If we want people to stand, they must feel safe to be able to do so. I know that the hon. Member for Vauxhall will agree with me on that. The whole purpose is to ensure that security is understood clearly by those standing and helping in those elections and those monitoring and regulating the expenditure.
We take this issue seriously. Where we think that there are new burdens, as the hon. Lady will know, with regard to voter ID and changes to postal votes, we have created a new burdens fund for local authorities. We keep those issues entirely and consistently under review, because—without sounding too lofty, because I think that there is comity between the Front Benchers on this— we really cannot put a price on the functioning of our democracy. The Government stand ready to do whatever they can, wherever and however they can, to ensure the safe progress and conduct of our elections such that when results are declared, irrespective of which body there is an election to, the victorious are confident in the legitimacy of their victory, as are their supporters and voters, but, more importantly—I suppose this is really the fulcrum on which our democracy rests and works— the defeated know that they lost fairly, squarely and legitimately. Everything that we have been doing post the Elections Act 2022, with all the flow-through of statutory instruments, is designed with that key importance in mind. I hope that that is helpful to the hon. Lady.
Question put and agreed to.
Draft General Aviation (Persons on Board, Flight Information and Civil Penalties) Regulations 2024
The Minister for Legal Migration and the Border (Tom Pursglove)
I beg to move,
That the Committee has considered the draft General Aviation (Persons on Board, Flight Information and Civil Penalties) Regulations 2024.
It is a pleasure to serve under your chairmanship, Dr Huq. The purpose of the regulations, which were laid under sections 27BA and 27BB(6) of schedule 2 to the Immigration Act 1971 and section 32B(6)(b) of the Immigration, Asylum and Nationality Act 2006, is to require owners, agents or captains of international general aviation flights to submit information about the flight and the persons on board online and in advance of the flight. General aviation flights are those that do not operate to a schedule. They include large commercially operated business jets, air taxis and private pilots in light aircraft. The regulations also amend the Passenger, Crew and Service Information (Civil Penalties) Regulations 2015, thereby making a failure to comply with the requirements of the new regulations liable to a civil penalty of up to £10,000.
The safety and security of our citizens is the Government’s top priority. We are committed to implementing resilient border security processes for all modes of international transport for counter-terrorism, policing and immigration purposes. A key part of our border security strategy is the ability to know who is travelling or intending to travel to and from the UK’s border before they arrive or depart. Through the provision of advance passenger information, known as API, our border officers can quickly determine who does and does not pose a threat to the UK or to UK interests and, importantly, prevent travel in accordance with the authority to carry scheme 2023.
All airlines that operate scheduled commercial international flights to and from the UK, apart from some flights within the common travel area, are required to provide API for all individuals on board their aircraft. In addition, all passengers who arrive on scheduled international flights are subject to full passport control checks at the border. Individuals who arrive in or leave the UK on international general aviation flights are not all subject to the same checks. They can arrive and depart at major airports where Border Force officers are located, but also at small airports with no permanent Border Force presence. Many international general aviation flights operate out of private airfields and landing strips where there is no permanent border control or police presence.
I reassure the Committee that all crew and passengers who arrive on international general aviation flights have their details checked. Border Force and the police use intelligence to address a series of security, policing, immigration and customs matters, then determine an appropriate operational response based on an assessment of the risk that each flight poses. That combination of intelligence assessment, expert judgment and spot checks means that we can provide an appropriate operational response.
The requirement to provide API forms a key part of our approach to managing international general aviation flights and the individuals on board. Currently, those who operate international general aviation flights are required to provide data in advance of departure for customs purposes and, on some routes, for security purposes, but they are not required to provide the information electronically in a way that enables law enforcement to process it efficiently.
To effectively assess the risk posed by individuals on board international general aviation flights, our border control authorities need not only to know who intends to travel in advance of their commencing their journey to or from the UK, but to receive the information in a way that supports effective processing to clear individuals who raise no concerns and to focus on subjects of interest. The submission of flight information, online and in advance, will allow Border Force and other law enforcement authorities to analyse and quantify the extent of the potential threat and level of risk. It will enhance automated checking and intelligence-led decision making to improve the effectiveness with which resources are deployed to meet flights.
Last April, the Home Office undertook an eight-week consultation, targeted at the general aviation sector, on regulations to require information about general aviation flights and persons on board to be submitted electronically in a manner that enables automated watchlisting. Respondents to the consultation understood the reasons for doing this, and most were supportive of the introduction of the regulations.
To be clear, the regulations will not require the provision of information over and above what is already required. They simply specify the manner in which the information must be supplied: it must be provided online. Already more than 50% of submissions are made electronically, and the regulations will have no impact them. For the pilots and operators who submit their flight information via email, or even fax, there will be a small impact. Border Force has introduced the free-to-use web service “Submit a General Aviation Report”, hosted on gov.uk, which general aviation owners, agents or captains can use to comply with the regulations.
For individuals arriving and departing in private aircraft, the requirements reflect and support the Government’s intention to have a fully digitised border system and allow us to know about and have control over who is travelling to, entering and leaving the UK. The draft regulations will ensure that information about general aviation flights and the people on board is submitted consistently, meaning that Border Force will be able to better assess any risks.
The Government recognise the significant economic benefit that the general aviation sector provides to the country and that the majority of owners, agents or captains make available to border authorities and the police information about their international flights and the people on board. The changes are a necessary and proportionate step in our continuing efforts to secure the border and keep our country safe. I commend the regulations to the Committee.
Feryal Clark (Enfield North) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Dr Huq. I welcome the regulations. I am not here to stand in the way of measures to assist Border Force, polices forces and other agencies to do their job and, once implemented, the regulations should ensure that they have complete and timely access to a range of advance passenger information to ensure that immigration controls are properly enforced. The requirements for flight operators to submit advance passenger information online should promote compliance with immigration law across the general aviation sector.
The statutory instrument establishes that failure to comply with the requirements will be subject to financial penalties of up to £10,000. I am interested to know how the decision to set £10,000 as the maximum amount for civil penalties was arrived at and what specific steps the Home Office and other Government Departments plan to take to monitor the implementation of and compliance with the rules. Will the Minister ensure that Parliament and the public will be kept up to date on how effectively the rules are enforced?
I am concerned about the capacity of Home Office officials, particularly Border Force, to adequately police compliance with the new rules. At present, only around 50% of advance passenger information is submitted electronically. To ensure that the remaining 50% or so of flights have correctly submitted the required information, there may well be a need for Border Force to maintain a significant presence at several airfields where there are typically no officers stationed.
Home Office data provided to the independent chief inspector of borders and immigration, David Neal, showed that last year UK Border Force failed to check the occupants of hundreds of private jets arriving at just one airport. The Minister told the shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), that the Home Office cleared 100% of high-risk general aviation flights either remotely or in person. Will he confirm what percentage were in person?
Will the Minister provide reassurances on the levels of Border Force funding and personnel that the Home Office plans to allocate to supervising the roll-out of and subsequent level of compliance with the regulations across the general aviation sector? There has been a decade of cuts to immigration enforcement. With that in mind, will he confirm what the total budget and headcount of Border Force have been in every financial year since its establishment as its own command in 2012? Of the total headcount, how many officers in each year were engaged specifically in monitoring and enforcing compliance with immigration controls in the aviation sector? If the Minister has that information, he can give it to us in Committee, but I understand that he might not have it all to hand so am happy for him to write to me.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Dr Huq.
I will not oppose the draft regulations, but I have some questions for the Minister, certainly about their timing, coming as they do on the back of the sacking of David Neal as the independent chief inspector of borders and immigration. I understand that on the day the reports came out about the misuse of London City airport flights by private jets, David Neal had a meeting scheduled with the Minister that was cancelled that morning. That is what David Neal told the Home Affairs Committee. If the Minister cared to enlighten us a little about the circumstances of the cancelling of that meeting, that would be useful.
I wish to put a number of concerns on the record. This statutory instrument puts the onus on the pilot to comply with the rules, rather than on UK Border Force. Given the nature of the accusations about some flights coming into UK airports, I am concerned that people who are not keen to comply with the rules in the first place will be even less likely to comply with the rules that the Minister is bringing in under the regulations. What consultation has the Minister had with the British Airline Pilots’ Association and other pilot representative organisations? Are they happy enough to take on the additional responsibility of ensuring that passengers on such flights are registered in the system?
The Minister talked about only 50% of passengers being registered by electronic submission at the moment. Will he tell us how long he will give people to comply with the regulations? Is he expecting instant compliance? People might not be familiar with electronic submission—the Minister suggested that they are faxing passenger information to UK Border Force—so will they be set up to do it in the way that he expects?
Who will check compliance with the system? The Minister talked about spot checks to ensure compliance with the regulations, but there are lots of small private airfields around the UK. When I tried to establish exactly how many small private airfields there are in the UK, the figure I found was around 144. Will the Minister assess the risk of particular airports? Is it likely that if compliance becomes heavier at London City airport, people will move their private flights elsewhere? It feels to me like a population who will, if they seek to evade Border Force, have at their disposal lots of means by which to do so. The Government are quite good at bringing forward laws, but not so good at implementation, so may I ask whether any additional staff will be put on to monitor electronic submissions, to spot check and to seek compliance on the submissions?
Is what is actually happening here that the Minister is legislating ahead of the April publication of what we expect to be David Neal’s damaging report on London City airport? David Neil also suggested to the Home Affairs Committee that the big delays in the release of his reports were to allow the Home Office time to find sticking-plaster solutions, so that the reports were not quite as bad by the time they came out because the Government could say, “No, we’ve fixed this. We’re doing something about it.” Is this the Government doing something about it eight weeks ahead of the promised publication of the report?
The accusations are serious: that UK Border Force failed to check hundreds of private jets. The potential was for criminals, trafficking victims and all kinds of people to be able to come into the country. That has been the allegation. The Daily Mail is not a publication I generally refer to in this place, but it cited the fact that at London City airport last year just 21% of general aviation flights were inspected by immigration officers. The airport handled 1,305 general aviation flights, with 687 categorised as high risk. Only 144 of those were checked by Border Force, and 543 had no passport inspections whatsoever. That is really quite worrying given the potential for people to come through.
I understand that the definition of high and low risk is part of the dispute here. The Minister has said previously in the House that it is about the persons on board, intelligence and things like that, but if someone was of a mind to try to circumvent UK border security rules, they would be able to find their way around this legislation quite easily. Instead of flying from an airport in Moscow, they might fly from an airport in the south of France, or they might try to find other ways so that their flight appears to be quite low risk. It would be interesting to hear an understanding of what that risk is and how the Government assess it.
I am also concerned about how the information made it to the press. I appreciate that the report is yet to come out, so the Minister may not want to comment on this, but the independent chief inspector of borders and immigration was also quite concerned about the insider threat to Border Force—about people becoming employees of Border Force and then using their role to allow people in and things to happen that should not. Could the Minister tell us anything more about that?
As I said, I will not oppose this statutory instrument, but I do have concerns about the manner in which this change is being brought forward. I would be interested to know more about the consultation process, and I am concerned about how the independent chief inspector of borders and immigration has been treated for trying to do his job in alerting Ministers to his concerns. He felt he was getting no response from Ministers, hence the situation he ended up in. It is unfortunate that this is the case, because he has been a diligent and fearless advocate for what he is trying to do.
Tom Pursglove
I appreciate the broad support for the measure from colleagues from across the Committee. On the point about year-to-year staffing in Border Force, I will happily write to the hon. Member for Enfield North with that information. It is worth saying that there is a degree of day-to-day flexibility, in operational terms, around the work of Border Force. Staff are surged in to deal with particular and competing pressures. This really goes to the heart of why the change we seek to introduce today is so important, because it will help us to respond operationally to the challenges of general aviation in a more targeted way. Where there are no risks or low risks, that can be dealt with accordingly, and we can then channel greater resource at dealing with higher-risk general aviation matters. That goes to the heart of what we seek to achieve. I will happily provide the hon. Lady with the information.
On the question about the former chief inspector of borders and immigration and the meeting that was organised with me, I had accepted that meeting as a matter of priority. It was organised but did not go ahead because of the information that was supplied to journalists. As I have said now several times in the House, that was done outside the proper process and was not respectful of the confidentiality requirements associated with such reports. The Home Secretary had been very clear with Mr Neal, as had I and the Minister for Countering Illegal Migration, that we would respond to the outstanding reports as a priority. We have now subsequently seen, as a House, the way in which we have gone about that.
I also refer the Committee to the commitment I made yesterday that the report on general aviation relating to London City airport will be responded to in the proper way within eight weeks. I undertake to make that commitment again today. I do not intend to deal with that report in a piecemeal manner. It is important that we have the chance to reflect properly on Mr Neal’s recommendations and the statistics included, with proper assurance and fact checking, and are able to respond in the usual way to the recommendations, but that will be done in a timely way. I give that undertaking again to the Committee.
It is important to say that there is no change to what is required in terms of the information that people are asked to provide. What is different is the manner and the way in which we are asking for it to be presented, through the online means, which will ensure that, for the reasons I touched on earlier, we are better able to respond to risk and to be in receipt of that information in a more timely and co-ordinated way. That should, of course, help to manage border security challenges more effectively.
On the point about the maximum penalty level, the figure is up to £10,000. That was adopted in 2015 as an appropriate and proportionate level, and we will keep the number and level of penalties under close review. It is important to recognise that there is a graduated approach. I hope that we do not have to resort to using the penalties, because I hope that people will want to engage properly with the process, recognising the imperative of ensuring our border security, but there is a graduated approach and we will keep the level of the penalty under review.
Alison Thewliss
I thank the Minister for that clarification. Why is it being levelled particularly at the pilot, rather than at the person who chartered the plane or the person who owns it?
Tom Pursglove
The reason is that there is clear accountability around an individual piloting a plane. The hon. Lady will appreciate that the legislation is relevant to a number of different types of individuals or operators, right the way through from individual private pilots to small businesses that fly people around. There is an obvious, clear line of accountability and sight when it comes to the way in which the penalty is issued and subsequently levied.
The hon. Lady was right to ask her fair and legitimate question about consultation and engagement. The Home Office has a good working relationship with representatives of the leisure and business general aviation sectors. Regular meetings are held, and invitees include the British Business and General Aviation Association, the Light Aircraft Association and the Aircraft Owners and Pilots Association.
To support the launch of the regulations, the Home Office has planned a comms campaign to ensure that all general aviation operators, agents or captains are aware of the changes that will come into force on 6 April, and the underpinning civil penalty regime, which we anticipate starting by the middle of February. It will consist of detailed guidance as well as high-level top lines that can be included in GA publications or mailshots. We will keep under review what more we can do to try to help to generate awareness, which is important because we want people to be compliant. In fact, I would go as far as saying that I want people to provide the data that is being asked of them, rather than having to resort to fines and extracting money from them for non-compliance.
On the related issue of compliance monitoring, the civil penalty regime will be applied consistently across all Border Force regions. To ensure that that happens, comprehensive guidance will be provided to all frontline Border Force officers. Each region will have a single point of contact for officers to approach regarding the process. In the event that a breach is identified, the GA owner, agent or captain will be served with an initial notice of potential liability setting out the breach that has occurred. The notice will then be reviewed by a central Border Force team, which will make the final determination on whether there is a liability, at which point the penalty notice will be served.
Understandably, there were also questions about what more we can do to try to improve the situation when it comes to the security of our border and the approach in relation to general aviation. Working with His Majesty’s Revenue and Customs, the Home Office has reduced the number of airfields into which an international GA flight can arrive, from more than 3,000 to 400. That is a result of the UK’s departure from the European Union, which has meant that to continue to receive international flights airfields have had to apply for a certificate of agreement. That is another significant step taken to manage the risk posed by GA flights, and it means that 16% of the GB aerodromes total will be approved to handle CTA and international flights from 1 January 2024, so that change has come about. The remaining 84% of aerodromes will be classed as undesignated and restricted to domestic movements only, which is helpful when it comes to being able to surge our Border Force resources to respond to issues and ensure we have the appropriate oversight of general aviation.
On the point about what is required, it is worth saying that more than 50% of the general aviation sector submits information using online methods. There will be no change and no impact for those people, as they are already complying. Yes, for those who submit via email, or even by fax, there will be a change, but we consider that to be a small change in behaviour and have provided a free-to-use web service through which to submit information, with a view to making it as easy as possible. The Home Office has drafted guidance for the sector that will be published in advance of the regulations coming into force. That will give the sector adequate time to understand its obligations and the penalties should it fail to comply.
A question was asked, understandably, about the speed at which and the timetable by which the reform is being brought to fruition. It is worth saying that this change has been in the making for some time; I am pleased that we are now bringing it forward. In saying that, it is worth making the point that this change is not related to the ICIBI report, in the sense that we have only just received that report and I will respond to it within eight weeks. This workstream has been ongoing for some considerable time in advance of that. We have not long been in receipt of the ICIBI report.
A point was made about a willingness to be scrutinised in relation to general aviation. I have said this in the House before, but it bears repeating: this was an area in relation to which senior leadership in the Home Office, on the officials side, had invited scrutiny from the ICIBI. Far from trying to be evasive on the issue of general aviation, there is most definitely a willingness to look carefully at it. There is most definitely a willingness to learn. There is always an opportunity to get ahead and advance recommendations in responding to them and getting on and doing the work ahead of publication. I want to do this work properly. I want to provide greater detail to the House, and to people further afield, about that report, by responding to it properly in the usual way, with proper responses to the recommendations, but I give an undertaking to do that in a timely way. We treat this issue with the utmost seriousness.
Question put and agreed to.
Draft Energy Bills Discount Scheme (Amendment) Regulations 2024
(2 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I beg to move,
That the Committee has considered the draft Energy Bills Discount Scheme (Amendment) Regulations 2024.
The Government responded decisively to the unprecedented rise in energy prices by delivering critical support to households and non-domestic energy consumers facing significant increases in their bills. More than £35 billion has been spent on supporting households via the energy price guarantee and the energy bill support scheme, and £8 billion is expected to be spent on non-domestic customers via the energy bill relief scheme and the energy bills discount scheme.
The energy bills discount scheme provides a discount on energy bills between 1 April 2023 and 31 March 2024 for those on non-domestic tariffs. It includes a higher level of support for heat suppliers with domestic customers, which reflects the fact that heat networks typically purchase their energy through commercial contracts and then sell it on to their domestic customers. That meant that heat network customers were not supported by the energy price guarantee as other domestic customers were.
The Energy Bills Discount Scheme Regulations 2023 require all heat suppliers that have eligible heat networks with domestic customers to apply for the higher EBDS heat network rate and then pass on to their customers the benefit that they receive. Without that support, domestic customers on heat networks would have been exposed to the full impact of high wholesale market prices. The support that we have provided through the EBDS regulations is estimated to be worth £180 million in total, and £1,200 for the average supported heat network customer.
Our intention in amending the EBDS regulations is to provide a finite window within which heat network operators can apply for EBDS support. The EBDS regulations allow rules to be made about the scheme, including rules about the time within which a heat supplier must comply with the duty to apply for the scheme. However, the duty to apply does not come to an end if heat suppliers fail to apply within the deadline imposed through the rules. The regulations and rules do not currently impose any end date to the requirement to make an application. The result is that a qualifying heat supplier that has failed to comply with the rules must still apply for support even after the end of the scheme, which means that the Government would retain a legal obligation to process applications indefinitely and would therefore need to maintain and pay for the administration of applications indefinitely.
The Department’s policy is to provide for an end date after which further applications cannot be made. The final date on which an application can be made is to be specified in rules, which will be made and published if the draft regulations are approved. The intention is for the deadline to be 31 March 2024, to align with the end of the period covered by the EBDS. The 31 March end date has been widely publicised to the sector.
There will be a limited exception to the 31 March deadline: a two-week limited extension for cases in which the duty to apply arises so close to the deadline that it would be unreasonable to expect a heat supplier to be capable of applying. Those heat suppliers would have until 14 April to apply.
The most important aspect is the impact of the scheme on the individuals and families who are facing pressures on their bills right now. It is right that we introduce the deadline to ensure that consumers receive the benefits of the scheme in a timely manner. It is also essential that support reaches as many people as possible, so my Department has conducted extensive engagement to encourage all eligible networks to apply.
It is important to note that the creation of the deadline via the rules will not close down routes for consumers to seek redress. Dispute resolution through the energy ombudsman remains open to customers beyond the deadline imposed by the amending regulations. Further-more, customers can pursue their claim in the civil courts if necessary.
In conclusion, the draft statutory instrument will amend the EBDS regulations so that the duty to apply for the support is a duty to apply before a deadline. It is an essential step towards ensuring that we support customers while taking measures to draw in public spending as pressures from energy prices ease. I commend it to the Committee.
Dr Alan Whitehead (Southampton, Test) (Lab)
As the Minister has explained, the draft regulations make a lot of sense administratively and in respect of future costs to the Government. The explanatory memorandum sets out the cost of keeping units in place essentially forever, because there was not originally a cut-off date for applying for the scheme or for being liable for the consequences of registration. The explanatory memorandum mentions a sum getting on for £6 million as the administrative consequences of not doing something. From that point of view, the draft regulations make a lot of sense.
From the point of view of consumers, and indeed of justice, the draft regulations make rather less sense. Does the Minister have any thoughts on that? Is there anything she would consider doing to mitigate the negative consequences? I address that question to her because I know that as the scheme has progressed she has always been keen for customers to get the full discounts to which they are entitled. She and I have discussed methods of ensuring that that happens. I completely exempt her from my criticisms of the problems that we are likely to see, because I know that her intentions are absolutely in the right place.
Let us go back to the introduction during the energy crisis of the methods by which discounts could be applied. As the Minister says, there were two schemes: the energy bills discount scheme for commercial and business interests, and the energy price guarantee for domestic customers. The energy price guarantee went straight to customers, because there was a direct relationship between the issuer and the receiver of the discount. However, although a substantial majority of customers were in that position, some domestic customers were not in a position to receive any direct discounts, because, as far as the scheme was concerned, they were not direct consumers of energy. They were people in park homes, people in shared properties in which a landlord had responsibility for the energy supply, or—as in this case—customers of a heat network. It was the intermediary, the heat network operator, that took the discount on the commercial energy bills discount scheme, not the customers themselves.
What happened after that was established as part of the overall discount scheme. I feel that some of the thinking on who got what and through which instrument was not pursued fully when the schemes first came in. Because of the speed at which they came in, the problem of pass-through to customers who would not receive the discount directly was not properly investigated in the first instance.
In an attempt to rectify that, a number of statutory instruments then made provision that, although the heat network operators would get the discount through the EBDS, they were essentially required to pass through the discount to customers. Indeed, because they had to apply for the discount, they were required to register to apply. The discount would not automatically come to them, as was the case in some other aspects of the energy bills discount scheme; they were effectively required to apply and register that they had applied.
The Chair
Order. I am following the Opposition spokesman’s comments very carefully. He is making an argument that the two schemes to which he has referred are related. He is entitled to make that argument, but strictly speaking it is not within the scope of the statutory instrument before the Committee. He has made his point clearly, but if he could move on to issues within scope of the statutory instrument, that would be helpful.
Dr Whitehead
I completely accept your guidance, Sir George, but I thought it essential for the elucidation of hon. Members to state the position as it actually was, as the discount scheme progressed.
The draft regulations relate specifically to combined heat and power companies required to give a discount to customers. When the Joint Committee on Statutory Instruments considered the original statutory instrument, it was concerned that it imposed an obligation on intermediaries to provide certain information to end users without a mechanism for enforcing it. There was no sanction on those bodies—in this case, energy networks as the intermediaries—to ensure that they would face legal consequences for failing to do so. In other words, if they did not apply to receive a discount or they did not pass it on to their customers, nothing would happen to them.
When I made that point in a debate at the time, the Government said, “We don’t think it necessary to have any kind of sanction in place, because most people will comply, on the basis that we have published a piece of secondary legislation that they will comply with.” However, it is apparent from the draft regulations that in many instances those people have not complied with the requirements. They either did not apply for the discount in the first place or have not passed it on to their customers; we do not know which, because there was never a sanction.
Now, at the end of the scheme, we are saying—perfectly reasonably for administrative purposes—that we should no longer require those people who have not applied to receive a discount to do so in future. As the Minister said, there is a brief period after 31 March when they will be able to do so, but after that it will stop. Effectively, the potentially large number of companies and organisations that have not applied the discount or passed it on will just get away with it. They will just continue with their business and have no liability after that to do anything for their customers. They will probably never know just how many of them have been disadvantaged as a result.
The explanatory memorandum indicates a range of customers and an amount of money of which customers may have been deprived, one way or another. It states:
“Based on data from existing applications, we estimate the value of lost discounts could be up to £1,200 per customer. This lost benefit would disproportionately affect disadvantaged groups—namely the elderly and ethnic minorities—who are significantly more likely to be on a Heat Network.”
There is a essentially a mini-impact assessment in the previous paragraph, which states that between zero and 3,000 quality heat suppliers
“have not applied for the scheme, representing £0-66m of support.”
That is the effect on customers.
The Minister has said that civil sanctions will continue to apply. It may well be that in many instances customers can still take their supplier to court if they think that the supplier has received a discount but it has not been passed through. However, it is very difficult for customers even to know that, and they certainly will not know it after the scheme comes to an end.
According to the impact assessment, there are a large number of customers who should have received a discount of £1,200 but have not, either because the company did not apply for the scheme or because it applied but did not pass anything through. Again, we do not know which is which, because we have no records. There were no sanctions relating to who was doing what with the scheme.
Although the Opposition do not intend to vote against the regulations today, I want to register substantial disquiet about how we have ended up here with the scheme. I know that the Minister is very keen on ensuring that everyone gets their discount. Are there any methods of reaching a more satisfactory ending, other than offering people the option of going to the energy ombudsman or the courts to get their discount? Most people would rather fly to the moon. I would value the Minister’s thoughts.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the Chair, Sir George. I echo many of the points raised by the hon. Member for Southampton, Test. There is a very real concern about the negative impact of the draft regulations, which leads me to ask whether the Government believe that the cost of living crisis is over. If they do, I say to them that that has not been the experience of constituents in Glasgow South West or, I am willing to wager, elsewhere across these islands.
The hon. Member made sensible points about the difficulties of the scheme and the fact that discounts have not been passed on. I agree with him that saying, “Go to the ombudsman,” will not fill businesses with confidence. Many domestic and non-domestic users do not view the ombudsman as having great teeth in enforcing its decisions. Court action will be taken only by the businesses that can afford to do so and that estimate that its costs are worth it vis-à-vis the money they would get back. The Minister needs to think through and answer the questions about the companies that have not been passing on the discount. There is a real issue with non-domestic customers and the challenges that they have faced.
Many businesses in Glasgow, in the rest of Scotland and across the UK have been stuck in or have signed multi-year energy contracts since the market peak in 2022. Research and evidence shows that hospitality businesses reported higher energy and supplier costs in 2023. I ask the Minister to look at that.
Now that the Government are ending this scheme, are they listening to the many calls to introduce longer-term reform? Are they looking to introduce blend-and-extend contracts so that businesses will do not need to wait until the end of their energy contract to see their energy bills begin to fall? I hope that the Minister will answer those points.
Amanda Solloway
I thank the hon. Members for Southampton, Test and for Glasgow South West for their valuable contributions. As has been stated, this was an incredibly complex matter to work through. I give an assurance that customers have been at the heart of all that we endeavour to do.
The non-domestic point is not particularly related to this instrument, which is quite narrow. I can give an assurance that we are working with UKHospitality and other organisations to think about how we talk to suppliers about blend-and-extend contracts and about third-party intermediaries, but that is probably a matter for a different debate.
Through the EBDS, the Government have provided essential energy bill support to heat network customers to help to avoid unnecessary financial pressures during the energy crisis. To date, we have paid out £50 million in support and have approved nearly 12,000 applications to ensure that those who are exposed to volatile energy prices are supported.
The hon. Member for Southampton, Test asked whether we are considering support for customers on heat networks. He also raised an important point about customers getting a pass-through discount. Customers on heat networks are not protected by the same regulations as other domestic customers, so the Government are introducing a new regulation for heat networks. Alongside protections around service quality, it will give Ofgem powers to investigate and intervene on networks where prices for consumers appear to be unfair.
A scheme developed in haste, in response to the energy crisis, was never going to be perfect, but we have tried to ensure that as many people as possible have been reached. I am glad that through the scheme we have helped hundreds of thousands of people when they needed it most. We continue to target communications towards heat suppliers with vulnerable customers, including housing associations and local authorities. I have been keen to ensure that we use all available methods to reach out to as many consumers and customers as possible.
The Government are also helping with £6 billion of investment in energy efficiency improvements. It is expected that regulations will introduce back-billing rules for heat network providers, like those that already exist to protect gas and electricity customers. Our ambition is that consumer protections will be regulated from next year, with price regulation beginning in 2026.
The amendment that the draft regulations make to the EBDS regulations is necessary to ensure that the Government are not legally obliged to accept applications to the scheme indefinitely. It also balances our responsibility to limit the fiscal burden on the taxpayer.
From next year, we will have new consumer protections in place, provided through the Energy Act 2023. Regulations created via the Energy Act will give Ofgem powers to investigate and intervene on networks if prices for consumers appear to be unfair, or if prices are significantly higher than for comparable heating systems.
Once again, I commend the draft regulations to the Committee.
Question put and agreed to.