Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment (a) his Department and (b) Ofgem has made of the potential disproportionate effect on (i) vulnerable and (ii) less-able-to-pay consumers of the mutualisation of costs from energy supplier failures.
Answered by Anne-Marie Trevelyan
Keeping down bills and protecting vulnerable consumers remains a key focus for Government and Ofgem. For example, the Government’s Warm Home Discount and Energy Company Obligation schemes are focussed on reducing bills for vulnerable households.
When a supplier fails and Ofgem appoints A Supplier of Last Resort (SoLR), they carefully consider the ability of the incoming supplier to effectively serve the new customers, including those in vulnerable circumstances. Very rarely does the appointment of a SoLR involve mutualisation of the costs of onboarding the customers.
Mutualisation of unpaid supplier bills under the Renewables Obligations support scheme, is now less likely to occur. The Government recently restored the link between the threshold at which mutualisation occurs and the annual cost of the scheme, making the threshold much higher. We will also be consulting soon on the wider matter of supplier payment default under the Renewables Obligation, which will consider both regulatory and legislative approaches.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, how many energy suppliers have been investigated by Ofgem for the purpose of Ofgem undertaking its financial responsibility to protect customers against mutualisation of costs in the event of energy supplier failure.
Answered by Anne-Marie Trevelyan
Ofgem closely monitors suppliers’ ability to meet their customer service and financial obligations. Ofgem are actively implementing the new rules in relation to financial responsibility, and will take action where there is a risk of consumer detriment. A range of tools is available to tackle poor behaviour, including enforcement action.
Mutualisation mechanisms play an important role in supporting the effective functioning of the energy market. Ofgem aims to ensure that suppliers do not behave in a manner that increases the likelihood or scale of costs to be mutualised across their competitors, and ultimately consumers, if and when they fail.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the potential effect of energy suppliers using customer credit balances to fund low-cost acquisition tariffs.
Answered by Anne-Marie Trevelyan
Deliberately collecting more credit than is required to service customers, in order to fund acquisition tariffs, would be unreasonable and unsustainable.
In January this year, Ofgem introduced a suite of new rules to ensure that suppliers act in a financially responsible manner and do not take actions that may result in their competitors and consumers facing increased costs should they fail.
We await the outcome of Ofgem’s recent consultation on further measures that would require suppliers to automatically refund customers’ credit balances every year, and protect any amounts they hold above a certain threshold.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the extent of the risks to consumers of energy suppliers failing in the context of recent increases in wholesale energy costs.
Answered by Anne-Marie Trevelyan
When an energy supplier becomes insolvent, for whatever reason, Ofgem revokes the supplier’s licence, and appoints another supplier to quickly take over serving the customers, via the Supplier of Last Resort (SoLR) process. Customer credit balances are protected under this process, nearly always without recourse to the Last Resort Supply levy, which allows for the mutualisation of certain costs of onboarding the new customers.
In the unlikely event where the use of SoLR powers would not be practicable, the Government has put in place a Special Administration Regime, whereby my Rt. Hon. Friend the Secretary of State may seek the appointment of an administrator, whose primary objective is to ensure continuity of energy supply at the lowest practical cost.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent discussions he has had with the British Ceramic Confederation on the effect of Government policy on freeports on UK ceramic manufacturing.
Answered by Nadhim Zahawi
My Rt. Hon. Friend the Secretary of State has met with the British Ceramics Confederation (BCC) on a number of occasions and discussed a range of issues relevant to the ceramics sector.
My Noble Friend Lord Grimstone has met with the BCC on 3 occasions since January. The most recent meeting was an Industry Roundtable on 8 March where EU Exit, COVID-19 and Net Zero were all discussed.
Freeports were not raised in these meetings. The Government continues to engage on topics the industry deems to be of interest.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
What discussions he has had with Cabinet colleagues on the effect on the UK manufacturing industry of proposed freeports.
Answered by Kwasi Kwarteng
Freeports will play a significant role in boosting trade and driving productivity across the UK. Private sector involvement – including from the manufacturing sector - was a key consideration in assessing the bids, and we are committed to supporting the industry more generally.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what plans the Government has to provide further financial support to the Industrial Energy Transformation Fund.
Answered by Anne-Marie Trevelyan
The Industrial Energy Transformation Fund (IETF) was announced in November 2018 as a £315 million scheme to provide industry with support for energy efficiency and decarbonisation projects. The first Phase 1 competition, worth £30m, was held in 2020 and all applicants have now been notified of the outcome. The second Phase 1 competition will be held in Spring 2021. Projects funded by the IETF will help industry to reduce emissions and energy bills, while creating a green economic recovery.
The 2020 Spending Review announced increased investment to tackle climate change and deliver my Rt. Hon. Friend the Prime Minister’s Ten Point Plan for a Green Industrial Revolution. The IETF is a key part of the Government’s plan to decarbonise industry and any further financial support will be considered at the next fiscal event.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what discussions he has had with Cabinet colleagues on redress for victims of HELMS Green Deal mis-selling.
Answered by Anne-Marie Trevelyan
No such formal discussions have taken place with Cabinet colleagues specifically on the subject of redress for victims of mis-selling by the former Green Deal Provider, Home Energy and Lifestyle Management Ltd (HELMS). The redress process is completed in line with the requirements of the Green Deal Framework Regulations.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, how many initial intention notices proposing reduction of a Green Deal loan mis-sold by Home Energy and Lifestyle Management Ltd have been challenged by complainants through additional representations.
Answered by Kwasi Kwarteng
The figures provided below are as of 7 September, except where otherwise specified.
A total of 218 appeals about the mis-selling of Green Deal Plans by the company Home Energy & Lifestyle Management Ltd (HELMS) have been referred to my Rt.Hon. Friend the Secretary of State. At the end of June 2020 (the latest date for which this data is available), the total value of loans, including interest and fees, that are the subject of the appeals was £1,700,338.
The Green Deal Framework Regulations require that, before imposing any sanction, the Secretary of State gives notice to affected parties of his intention to impose a sanction (an initial notice, referred to as an Intention Notice) and provides them with an opportunity to make representations before it is made final.
Complainants are not required to indicate acceptance or otherwise in response to Intention Notices or final Sanction Notices. Affected parties, including complainants, may make representations in response to Intention Notices and can appeal final decisions (set out in final Sanction Notices) to the General Regulatory Chamber of the First–tier Tribunal.
One hundred and twenty-one HELMS complainants have yet to receive an Intention Notice. One hundred seventy-four HELMS complainants have yet to receive a final decision.
Ninety-one Intention Notices in respect of mis-selling by HELMS proposed a reduction in loan amount. Of these, complainants have made representations in 37 cases. As complainants are not required to indicate acceptance of a proposed reduction the Department does not hold such records.
The total value of proposed reductions set out in Intention Notices and final Sanction Notices relating to mis-selling of Green Deal Plans by HELMS to date is £376,628.
Where Intention Notices have proposed reductions in loan amounts, the highest reduction to date has been 68%, the lowest reduction, 30%, and the average reduction, 50%.
Six Intention Notices in respect of mis-selling by HELMS have proposed cancellation. To date, there have been 4 cases where Intention Notices proposed cancellation but the Secretary of State’s decision, set out in the subsequent final Sanction Notices, was to impose reduction following representations.
No complainants who have received Intention Notices proposing cancellation have made representations in response to those Notices.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, in response to complaints made to date to his Department in relation to misselling of Green Deal loans by Home Energy and Lifestyle Management Ltd (HELMS), what the (a) highest, (b) lowest and (c) average loan reductions offered to those complainants were as a proportion of the overall loan amount.
Answered by Kwasi Kwarteng
The figures provided below are as of 7 September, except where otherwise specified.
A total of 218 appeals about the mis-selling of Green Deal Plans by the company Home Energy & Lifestyle Management Ltd (HELMS) have been referred to my Rt. Hon. Friend the Secretary of State. At the end of June 2020 (the latest date for which this data is available), the total value of loans, including interest and fees, that are the subject of the appeals was £1,700,338.
The Green Deal Framework Regulations require that, before imposing any sanction, the Secretary of State gives notice to affected parties of his intention to impose a sanction (an initial notice, referred to as an Intention Notice) and provides them with an opportunity to make representations before it is made final.
Complainants are not required to indicate acceptance or otherwise in response to Intention Notices or final Sanction Notices. Affected parties, including complainants, may make representations in response to Intention Notices and can appeal final decisions (set out in final Sanction Notices) to the General Regulatory Chamber of the First–tier Tribunal.
One hundred and twenty-one HELMS complainants have yet to receive an Intention Notice. One hundred and seventy-four HELMS complainants have yet to receive a final decision.
Ninety-one Intention Notices in respect of mis-selling by HELMS proposed a reduction in loan amount. Of these, complainants have made representations in 37 cases. As complainants are not required to indicate acceptance of a proposed reduction the Department does not hold such records.
The total value of proposed reductions set out in Intention Notices and final Sanction Notices relating to mis-selling of Green Deal Plans by HELMS to date is £376,628.
Where Intention Notices have proposed reductions in loan amounts, the highest reduction to date has been 68%, the lowest reduction, 30%, and the average reduction, 50%.
Six Intention Notices in respect of mis-selling by HELMS have proposed cancellation. To date, there have been 4 cases where Intention Notices proposed cancellation but the Secretary of State’s decision, set out in the subsequent final Sanction Notices, was to impose reduction following representations.
No complainants who have received Intention Notices proposing cancellation have made representations in response to those Notices.