Fuel and Heating Bills (Financial Assistance)
To ask the Scottish Government what its position is on reports of a 50 per cent increase in households requesting financial assistance to pay fuel and heating bills. (S4T-01315)
The Scottish Government is committed to eradicating fuel poverty and has allocated more than £0.5 billion since 2009 to a raft of programmes to help people in Scotland to heat their homes affordably. It is fuel prices, which we have no control over, that have driven up fuel poverty. The fuel poverty rate for 2014 would have been around 9.5 per cent instead of nearly 35 per cent if fuel prices had risen only in line with inflation between 2002 and 2014. All of the increase in fuel poverty since the introduction of the fuel poverty target can be explained by above-inflation energy price increases.
The United Kingdom Government is planning a further £12 billion cut to the welfare budget by 2019-20. That goes too far, and it is impacting on the most vulnerable households by decreasing their incomes. We are doing what we can to protect household incomes and to mitigate the impacts of the UK Government’s welfare cuts. That includes ensuring that the Scottish welfare fund is available as a safety net for the most vulnerable households in the country. Around 178,000 households have benefited from that vital lifeline, and half of the £81 million that has been spent to date has gone to communities in the 20 per cent most deprived areas of Scotland.
The minister mentioned the period between 2002 and 2014, but there has been a 50 per cent increase in requests for financial assistance in one year. We were told that fuel poverty in the poorest households had been mitigated by Scottish National Party spending, but it has not been. The minister said:
“There is no complacency about the issue whatsoever.”—[Official Report, 27 January 2016; c 49.]
Meanwhile, SNP ministers have cut 13 per cent from the fuel poverty budget. If the minister believes that the Scottish Government is doing everything that it can to reduce fuel poverty, will she explain how her Government’s decision has led to a 50 per cent increase in applications for help with heating bills in just one year?
I say to the member that the very purpose of the Scottish welfare fund is to help people on low incomes who are struggling to meet essential expenditure, such as expenditure on fuel bills. Many of those people are already in homes that have had energy efficiency measures installed in them. It is because of their low incomes that they are struggling to meet the cost of the bills, and it is because of the cost of the fuel that 19 per cent of households on band D and above are in fuel poverty. The purpose of the Scottish welfare fund is to help out people in those circumstances, and I would have hoped that Jim Hume would have welcomed that.
I thank the minister for her response, but 845,000 households are in fuel poverty, and the Scottish Government’s response is to install energy efficiency measures in 14,000 homes. I believe that ministers have failed to grasp the scale of the problem. We have heard that it is everybody else’s fault, but the Scottish Government has powers to address the issue. Will the minister commit to taking additional measures so that people do not have to rely on crisis grants to keep their homes warm?
We have already installed measures in 700,000 homes; 900,000 measures have been installed, and the money that we have set aside this year will improve energy efficiency in a further 14,000 homes. We are working very hard to end fuel poverty. We have set up a strategic working group to work alongside the Scottish fuel poverty forum and the rural fuel poverty task force to build on the efforts that we have already made to drive forward the fuel poverty agenda. There is no complacency on our part. We have no control over fuel prices. We have put in place measures to help those on a low income, and we will continue to do that.
On “Reporting Scotland” last week, I heard a spokesperson from Tackling Household Affordable Warmth—THAW—Orkney say that the main reason for fuel poverty was the high price of electricity, as the minister has said. The additional 2p supplement that applies in the Highlands and Islands makes the electricity there the dearest in the United Kingdom. The Liberal-Tory coalition did not try to mitigate that and the Tory Government has not done so, either. Will the Scottish Government press the UK Government to end what is the main cause of fuel poverty in my area?
The member makes a very good point, which is one that we have made previously to the UK Government and which we will continue to make to it. At the same time, we will call on the energy companies to reduce energy costs further by passing over the wholesale cost savings to gas and electricity customers now to help bring down the cost of fuel, which is, as the member said, the main driver of fuel poverty in Scotland.
Laggan and Tormore Fields (Productivity)
To ask the Scottish Government whether it will provide an update on the productivity of the Laggan and Tormore fields west of Shetland. (S4T-01318)
The Scottish Government welcomes the announcement from Total that production has started from the west of Shetland Laggan and Tormore fields. The gas from those fields will be sent to the newly constructed Shetland gas plant, where it will be treated and processed before being exported to the mainland. It is the success of such large investment projects that will see the Shetland Islands remain a key hub for oil and gas production in the North Sea. Production from the North Sea as a whole is now increasing and cost efficiencies are being achieved. The Laggan and Tormore fields, which have a lifespan of 20 years, will provide a further boost to North Sea production.
Given reports that the gas produced from the Laggan and Tormore fields is expected to provide around 8 per cent of the United Kingdom’s gas needs, equivalent to that of about 2 million homes, does the cabinet secretary agree that this is a significant boost to North Sea production; that with 22 billion barrels of recoverable oil remaining in the North Sea, the oil and gas sector still has a viable and, indeed, bright future; and that the UK Government needs to act now in the industry’s time of need to provide an appropriate fiscal regime that helps to maximise economic return?
It is very clear from the experience of Total in relation to the Laggan and Tormore fields that the existence of a tax allowance for deep-water gas developments has undoubtedly assisted in securing that advancement, which rather makes the point that Mr MacKenzie raised in his supplementary question. I very much welcome the steps that were taken in the budget last spring by the Chancellor of the Exchequer to improve the fiscal regime in the North Sea; it certainly needed to be improved and it was improved. We would encourage further developments as part of the preparation for the budget later this year, which would enable us to address some of the further challenges that are required to be addressed to improve the fiscal position of North Sea oil and gas companies.
I agree with the Deputy First Minister’s broad analysis of Total’s reason for its investment and, indeed, its commitment to staying the course on the project, given gas prices. However, with regard to his representations to the chancellor prior to the budget, does the Deputy First Minister accept that there is going to be a deal of decommissioning in the east Shetland basin in particular and that it is very important that the tax relief that is provided for decommissioning goes to ensure that that work stays in the UK? We would rather have it in Scotland, but it should certainly stay in the UK and not go to Norway, as some already has.
I entirely agree with Mr Scott’s point. Of course, he will be familiar with the assistance that the Government has given for the development of decommissioning capability in the Shetland Islands, which I think has been an important contribution. I also have to say that the opportunities have been strongly embraced by the Lerwick Port Authority and the Shetland community.
Mr Scott correctly highlights a significant economic opportunity. We will ensure that our representations adequately make the case on the points that he raises. It is inevitable that there will be a focus on decommissioning and we have to make sure that as much of that activity as possible happens as close to home as possible. Although it is accepted that there will be an increased level of decommissioning activity, we have to ensure that that activity is not premature and that we take other steps to ensure that there is a viable fiscal regime in place to support the development of companies and the propositions that they take forward so that we can maximise the capability to extract sustainably the resources that exist in the North Sea oil and gas sector.
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