Energy Bills Discount Scheme Regulations 2023 Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 Energy Bills Discount Scheme Pass-Through Requirement Regulations 2023 Energy Bills Discount Scheme Pass-Through Requirement (Heat Suppliers] Regulations 2023

Debate between Amanda Solloway and Dan Carden

Monday 22nd May 2023 General Committees

[Amanda Solloway]

It is a great pleasure to serve under your Chairmanship, Mrs Latham. The regulations were laid before the House on 25 April 2023, and I will refer to them collectively as the EBDS regulations.

The Government responded decisively to the unprecedented rise in energy prices caused by Putin’s brutal invasion of Ukraine by delivering critical bill support to households, businesses and other non-domestic energy consumers. More than £7 billion of support has been delivered by the energy bill relief scheme alone. That equates to approximately £35 million a day, and it has helped many businesses to keep the lights on.

The Government’s emergency legislation paved the way for the support package to be delivered rapidly across the entire United Kingdom. The Energy Prices Act 2022 was introduced in Parliament on 12 October 2022 and provided the legislative footing needed to ensure that the Government could deliver much-needed support to UK businesses through the energy bills discount scheme.

These regulations are needed to implement and operationalise the energy bills discount scheme. That follows the energy bill relief scheme, which ended on 31 March, and it ensures continuity of support to cover energy consumed between 1 April 2023 and 31 March 2024. Although wholesale energy prices have fallen since their peak, many consumers may still be exposed to higher bills and be in need of support, and the scheme takes that into account. The purpose of the regulations is to reduce the charges for electricity and gas supplied by licensed and licence-exempt energy suppliers to eligible non-domestic customers, and to make payments to suppliers in respect of those reductions in Great Britain and Northern Ireland.

Each statutory instrument is a replacement for an earlier set of regulations that implemented the original EBRS. They ensure that any end user receiving energy that is supplied with the benefit of these schemes through an intermediary will get a “just and reasonable” share of that benefit. Without such intervention, non-domestic customers would no longer be provided with support. Instead, they would be exposed to the full impact of high wholesale market prices. In order to protect all eligible customers from excessively high energy bills, the EBDS will run for a 12-month period from 1 April 2023 to 31 March 2024.

I will now turn to the detail, starting with the Energy Bills Discount Scheme Regulations 2023.

[Dan Carden (Liverpool, Walton) (Lab)]

I want to raise an issue that has come up a number of times in my constituency. Residents in social housing are having to pay more for the electricity and gas that fuels things in communal areas, such as lighting. That is because housing associations have to buy that at a commercial rate. They then pass the cost on to residents, and sometimes it is four or five times higher than the rates that residents pay for their personal energy consumption. Is there anything in the regulations to address that? If there is not, will the Minister write to me to say whether the Government are going to do anything about the extortionate rises for residents in social homes in my constituency?

[Amanda Solloway]

I thank the hon. Member for that good point. I will come on to exactly what this Bill is hoping to address, but I encourage him to write to me. I am also happy to have a face-to-face meeting.

I turn to the detail. The regulations set out that, with a few exceptions, all domestic customers with electricity and gas contracts from both licensed and licence-exempt non-domestic energy suppliers will be eligible for a discount when the wholesale element of their contract is above a certain level. Licence-exempt supply includes energy taken from the public electricity or gas grid, or received via wire or pipe from a licence-exempt provider, where the customer is charged prices pegged to wholesale prices.

The Energy Bills Discount Scheme regulations for Great Britain and the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 provide for three elements of the scheme for end users of licensed suppliers, and the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 replicate them for end users of licence-exempt suppliers.

The first element is a baseline per-unit discount applicable to all non-domestic customer energy bills throughout the scheme’s duration. That discount will be applied if wholesale prices are above a certain price threshold.

The second element is that a higher rate of relief will be provided to non-domestic customers that carry out a substantial part of their UK activities in certain energy and trade-intensive sectors, following a review of the operation of the previous energy bill relief scheme. Those industries have been identified as being less able to pass through their increased energy costs to customers because of international competition. As with the baseline element of the scheme, the discount is applied if wholesale prices are above a certain level.