Official Report 980KB pdf
The next item of business is a statement by Màiri McAllan on the Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill. The cabinet secretary will take questions at the end of her statement, so there should be no interventions or interruptions.
14:24
I begin by emphasising that the Scottish Government is committed to decarbonising heat in buildings by 2045. That commitment was restated fulsomely in “Scotland’s Draft Climate Change Plan 2026-2040”, which was published by my colleague Gillian Martin on 6 November.
The Scottish Government has shown clear leadership in the heat in buildings sector, demonstrated not least by our grant and loan schemes, the legislative requirement for new homes to install clean heat and our continued drive to promote investment and growth in heat networks. Faced with a concerning rise in anti-climate rhetoric, the draft climate change plan maintains that leadership. It confirms our target to decarbonise the heat in Scotland’s buildings by 2045 in a manner that is consistent with our commitment to reduce fuel poverty, and to do so by maintaining our vital support for those who need it most.
It was my intention to build on that work by introducing a heat in buildings bill in this parliamentary session. The Scottish Government has worked at pace to produce a bill ready for introduction. However, it has become clear that proceeding now would not allow the Scottish Parliament to consider the bill in the context of emerging United Kingdom-wide developments. That is particularly the case in respect of the forthcoming UK warm homes plan and on-going work on energy market reform.
I expect the warm homes plan to set out crucial detail on how and to what extent the UK Government plans to rebalance energy prices, particularly the price of electricity relative to gas, in a way that will make clean heating systems more affordable to run. That is a critical part of ensuring that our work to decarbonise homes does not exacerbate fuel poverty—something that I am particularly committed to at a time when more and more people are struggling with spiralling energy costs and resultant debt, and when around 34 per cent of households are living in fuel poverty, which is largely driven by a rise in energy prices.
I am disappointed that the UK’s warm homes plan has been delayed so considerably. As well as continuing to develop the policy content of the bill and consider its associated costs, I have been pressing successive UK ministers in recent months to publish the warm homes plan or, at least, to share with us its content vis-à-vis electricity prices. Regrettably, that has not materialised.
There is no longer time in this parliamentary session to give full consideration to a bill, nor can I ask the Scottish Parliament to consider such an important and complicated bill without a full understanding of the policy context across the UK, which we understand is likely to emerge before the end of the year. Doing so would not be fair to consumers and would risk misalignment and confusion for businesses.
As such, I confirm that the Scottish Government will not introduce a heat in buildings bill during this parliamentary session. Instead, I have today published our draft bill, with a statement of intent to introduce a bill as early as we can in the next parliamentary session, subject to the outcome of the 2026 election. I strongly call on UK ministers to ensure that they bring forward provisions to rebalance the cost of electricity relative to gas, allowing us to pursue vital decarbonisation in a way that we can be sure protects households from fuel poverty.
On the content of the draft bill, members will see that it sets a technology-neutral heat decarbonisation target to replace direct-emission heating systems in all Scottish buildings as far as reasonably practicable by 2045. If ultimately passed, that would put into legislation the target that the Scottish Government is already committed to in policy as part of the climate change plan. The bill will require the Scottish Government to publish a heat decarbonisation strategy every five years and to report regularly on progress, ensuring transparency and accountability and enabling us to update our approach as new technologies develop.
The draft bill includes a regulation-making power to introduce minimum energy performance requirements for buildings that use direct-emission heating systems. The intention is to use that power for the owner-occupied and non-domestic sectors.
The draft bill includes provisions regarding heat networks, including a regulation-making power that may be used to require qualifying buildings in a heat network zone to connect to the heat network or to decarbonise their heating system; a regulation-making power to provide for heat network installation and maintenance licences; and changes to the Heat Networks (Scotland) Act 2021 to streamline its regulatory regime.
The draft bill provisions represent an ambitious, pragmatic and, crucially, flexible advancement in the sector, building on what is already in the climate change plan.
Today’s publication of the draft bill offers an opportunity for us to continue undertaking engagement over the remainder of the parliamentary session. That will include launching a targeted consultation in the new year on detailed proposals for heat network installation and maintenance licences to support the implementation of the draft heat network provisions. That will enable the next Scottish Government to move quickly to introduce secondary legislation following the passage of the bill.
The draft bill builds on the huge success that we have made in the heat in buildings sector over the course of this parliamentary session. We have allocated £1.67 billion of funding through our heat in buildings schemes, including a committed spend of more than £840 million for energy efficiency and clean heat projects. Since the start of this parliamentary session, heat in buildings programmes have supported an average of 15,000 households annually, including those in, or at risk of, fuel poverty and, since the launch of the first warmer homes Scotland scheme in 2015, we have invested around £399 million and helped more than 47,000 households across Scotland to live in warmer homes that are more affordable to heat. So far in 2025-26, the average fuel bill saving across all completed applications is approximately £350 per year.
We intend to build on that. I can announce today that we are introducing grant support for home owners to enable connections to heat networks through our long-running home energy Scotland grant and loan scheme, reinforcing our commitment to meeting targets for heat network deployment. That will see grants of up to £9,000, together with loans, to enable households in island and remote areas to connect to local district heat networks and follows engagement by the First Minister during a recent visit to Shetland, demonstrating the responsiveness of our approach and our determination to back investment in heat networks, which we can pursue now and do not need to wait for legislation. Indeed, the Scottish Government has awarded more than £62 million to enable the development of heat network projects in Scotland through our heat network fund and the low-carbon infrastructure transition programme.
We also recently laid new energy performance certificate regulations, which, if approved, will bring an improved EPC rating system into force in August 2026, and we have recently completed our consultation on minimum energy efficiency standards in the private rented sector, helping us to develop regulations that are fair, affordable and achievable.
Further legislation will form a key part of our approach. The issue of heat in buildings affects everyone of us in Scotland and we need to approach the sector in a way that harnesses the opportunities without exacerbating the risks, including the risk of fuel poverty. I believe that the bill that we have drafted finds that balance through a commitment to collective action, taking individuals, communities and businesses with us on a transformative journey, but we need clarity about UK Government action on energy costs.
Today, my officials and I are writing to stakeholders to begin the next phase of partnership work on the policy direction of the bill. Taken together with our draft climate change plan, which sets out our clear commitment to decarbonisation, that marks a real commitment to drive progress on clean heat in an ambitious, yet pragmatic and flexible, manner that can adapt to the technological advances that will undoubtedly emerge in the period to 2045 as well as reflecting Scotland’s diverse building stock, with its urban and rural requirements and differing abilities to adapt to change.
Crucially, as I have set out in my reasons today, we will always balance our actions to decarbonise with the imperative of relieving fuel poverty and I again call on UK ministers to take the action necessary so that we can progress.
We will engage widely with the sector and with members from across Parliament, particularly as the UK-wide position becomes clearer. I trust that Parliament will agree with me on the importance of making informed law, from the clearest and most up-to-date position. It is ever thus but is particularly important when the law that we propose to make goes right to the heart of the most important asset that most people will ever have—namely, their home. I trust that Parliament will agree that, for want of just a few months, however frustrating that is, essential clarity on something as fundamental as electricity prices is worth having and that we should consider our position in light of that as we legislate.
The cabinet secretary will now take questions on the issues raised in her statement. I intend to allow around 20 minutes for questions, after which we will move on to the next item of business. Members who wish to put a question should press their request-to-speak buttons.
I thank the cabinet secretary for advance sight of her statement.
We must be serious about the situation that we are facing. This is a really embarrassing day for the Scottish Government. When Gillian Martin told Parliament that she was going back to the drawing board on the heat in buildings bill, she promised that any revised bill would not make Scottish households poorer, yet we have a draft bill that seems to be on the road to nowhere and still demands expensive energy efficiency upgrades from home owners without giving any detail about the standards that they would have to reach.
Given the Scottish Government’s track record on the issue, my main concern is that this is yet another attempt by the SNP to impose significant costs on home owners to reach climate targets that are simply not practical. Separately from the bill, the Scottish Government is also pressing ahead with regulations to impose minimum energy efficiency standards on the private rented sector, and that is not to mention the disastrous Housing (Scotland) Act 2025, which will push up costs for landlords and tenants.
Is it not about time that the Scottish Government stopped using the private rented sector as guinea pigs in its botched legislative experiments? Will the cabinet secretary tell us by how much the Scottish Government expects the average home owner will be left out of pocket due to these changes?
I cannot help but feel that Meghan Gallacher might not have read the content of my statement prior to formulating her questions. If she had read it, she would have seen that the reason that I am presenting to Parliament today for taking a pause—however regrettable—is that I want to know what the UK Government intends to do with respect to the cost of electricity, so that we can take forward the work to decarbonise in such a way that we have surety that it will not exacerbate fuel poverty and will be manageable for consumers and households. That is exactly why I brought my statement to Parliament today, so I am a bit perplexed by the tenor of the question.
In respect of the latter point about costs, all of that has to be worked out. I want Parliament to be able to scrutinise and consider costs in the light of the most up-to-date information. That information comes from a UK warm homes plan, on which ministers have, I think, made no less than six representations to successive UK ministers, but clarity has not been forthcoming. However regrettable the pause in bringing forward legislation may be—in the meantime, we have published the draft—it is about giving Government and Parliament the opportunity to make important laws with the full suite of information in front of us.
In 2021, we had a heat in buildings strategy. In 2023, we were promised a heat in buildings bill. Experts said that the bill would place impossible financial burdens on households, but the Government carried on consulting and then withdrew it, saying that it would place financial burdens on households. The Government then announced a new and improved bill in the spring of this year. Untroubled by any sense of irony, it seems that, today, it has given us a draft bill while, at the same time, announcing that there will be no bill.
This is beyond farcical. Blaming a Government that has been in office for 18 months while home owners and industry have been waiting for clarity for five years is absolutely absurd. How can this Government say with any credibility that it has shown any leadership in the heat in buildings sector?
“Irony” is an interesting word for Mark Griffin to choose to put to me today, given that the entire reason that I have had to bring the statement to Parliament is because of the complete failure of his colleagues in the British Labour Party and the UK Government to clarify their position in respect of the warm homes plan. [Interruption.]
Let us hear the cabinet secretary.
As I said, Scottish ministers have now pressed UK ministers on no fewer than six occasions since the warm homes plan was first mooted. I have to give UK ministers some due: disruption was caused by the former Deputy Prime Minister having to leave the Government and by ministerial reshuffles having to take place as a result. However, if Mark Griffin thinks that it would be sensible for the Scottish Government or the Scottish Parliament to proceed with a bill that pertains to the type of energy and the cost of energy throughout Scotland—at a time when 33 to 34 per cent of households are in fuel poverty—when I do not have clarity from the UK Government on what it intends to do on the cost of electricity, I am afraid that that is simply irresponsible.
We have a strong record on delivering on heat in buildings in Scotland. I continue to do that by rolling out further the grants and loans that are available to connect to heat networks, and we will continue to take forward the work on the bill.
I ask all members to resist any temptation to contribute when they have not been called to speak.
In such a crucial policy area, it is vital that stakeholders in the sector are directly involved in key conversations and plans that are brought forward by the Scottish Government. Can the cabinet secretary provide further information on what engagement the Government has had and will continue to have with both the energy and housing sectors on the next steps?
I completely agree. It is vital that the transition must be taken forward with communities, not imposed on them. Our consultation on the heat in buildings bill received more than 1,600 responses, and that feedback has helped to develop the content of a significant and complicated bill, the draft proposal for which members have in front of them today.
Since the consultation closed, we have continued to engage widely with stakeholders in the heat in buildings sector. Over the summer, I hosted a series of round tables with consumer groups, energy stakeholders, businesses and others. Last week, I held a round table with representatives of energy consumer organisations, at which we discussed both the need to decarbonise and the fact that it is essential that that is done in a way that people can afford and that does not exacerbate fuel poverty. All of that will continue as we take forward the programme.
Meeting energy efficiency standards can come at great expense for home owners and landlords, particularly in rural areas. In her statement, the cabinet secretary indicated that there will be grants of up to £9,000, together with loans for householders in island and remote rural areas, to connect to local district heat networks. Will she consider certain exemptions for rural properties when meeting those standards would create a significant financial burden for home owners, landlords and tenants?
I am sorry if I have picked up Alexander Stewart incorrectly, but I think that he was referring to exemptions from what would be proposed in the bill. The bill is intentionally drafted to offer flexibility in the type of technology. I note that technology will advance in the years to 2045, and we are conscious that different technologies will suit different housing types across urban and rural Scotland. I therefore trust that, when the bill is taken forward, depending on what happens in the election and what the UK Government does with the cost of electricity, Alexander Stewart will see that flexibility being borne out.
I recognise that the Scottish Government’s plans depend on essential clarity on key UK Government actions in reserved policy areas. Will the cabinet secretary expand on what communication, if any, she has received from her UK Government counterparts regarding their consistently delayed warm homes plan, and what impact that will have on progress in the heat in buildings bill in Scotland? [Interruption.]
There is a lot of noise coming from members on the Conservative benches. Those members do not seem to appreciate the nature of devolution, in that, when a Government in London is allowed to oversee our nation’s energy policy it will have impacts on what a national Government can or cannot do. I have made it clear to UK ministers that clarity on their warm homes plan and on reserved matters such as electricity pricing and market reform is essential for us to have a fully informed debate on those critical matters in Scotland.
Rona Mackay is right to point out that the report has now been delayed several times. There has been an unfortunate amount of speculation, mainly in the press—in fact, I have learned more about the plan in the press than I have in my ministerial engagements with my counterparts. However, ultimately, it is just speculation. What this Parliament needs in order to legislate on behalf of the people of Scotland is clarity—a clarity that we do not have.
The cabinet secretary mentioned that more than a third of our households live in fuel poverty and that one in five is in extreme fuel poverty. What is the Scottish Government going to do now to accelerate investment in making people’s homes energy efficient, so that their heat is not wasted? What is the cabinet secretary doing to support every local authority in Scotland to implement their local heat and energy efficiency strategy plans so that our constituents have heat networks that they can link to and can qualify for the grant that was mentioned?
It is worth putting on the record again the difference that our long-standing loan and grant arrangements have made in Scotland. We have allocated £1.6 billion of funding through our heat in buildings schemes during this parliamentary session alone, including a committed spend of £840 million for energy efficiency and clean heat projects, which—I agree with Sarah Boyack—are essential. That has supported an average 15,000 households annually, including those at risk of fuel poverty. As I mentioned in my statement, since the start of the warmer homes Scotland programme, we have helped more than 47,000 households across Scotland to live in homes that are warmer and cheaper to heat.
I also point Sarah Boyack to our work on a social tariff, and I hope that she can advocate for that to her colleagues in UK Labour. We have undertaken very careful work with industry experts to develop a social tariff, and I published the methodology behind it just last week. It is a targeted at-source discount, which we think would reduce the energy bills of around 660,000 people in Scotland by up to £700 a year, taking about 135,000 people out of fuel poverty. I will be making the case for a social tariff to the United Kingdom Government, and I hope that Sarah Boyack will, too.
The cabinet secretary mentioned electricity prices in her statement. High electricity and gas prices are the greatest driver of fuel poverty, and I am sure that many people across the chamber will share my deep frustration with the UK Labour Government, which pledged to cut energy bills by £300 but, instead, has overseen a rise in energy bills of £200. Can the cabinet secretary advise what impact that has on delivering the Scottish Government’s ambitions and say what effect that broken promise from Labour is having on thousands of families across Scotland? Will she join me in calling on the UK Labour Government to take immediate action to bring down electricity prices and put money back in the pockets of those who need it most this winter?
Yes, I agree entirely with Kevin Stewart. I have mentioned a couple of times today the investment that we have made and the number of households that that has helped, but it is also worth putting on the record that, so far in 2025-26, the average fuel bill savings across all the completed applications to our loan and grant scheme are approximately £350 a year. That is helpful, but it will represent a drop in the ocean for the households that have seen their energy bills spiral year after year, while successive UK Governments have utterly failed to get a grip of the situation.
Kevin Stewart is quite right to remind the chamber that the UK Labour Party came to power promising a reduction in energy bills of £300 and that, so far, bills have gone up by nearly £200. Therefore, I urge it to take on the social tariff modelling that we have produced, understand the impact that it could have on taking people out of extreme fuel poverty and fuel poverty, and join me in calling strongly for its adoption across the UK.
I am keen to include all members, so I am grateful for concise questions and responses.
The SNP had already let Scotland down when it first delayed the bill—dropping it entirely from this parliamentary session is more than a disappointment, and stripping the most serious content out of it will please only the new climate-change deniers on the political right. To blame anyone else for that decision, which is entirely of the SNP’s making, adds insult to injury. To do all that while mouthing platitudes about climate leadership turns this statement into a sick joke. Does the SNP understand that it will be held accountable for locking people into dependence on costly and polluting fossil fuel for years to come and for failing to back what should be a thriving clean heat industry in Scotland?
I share Patrick Harvie’s determination to rise to the challenge of climate change, and I understand how critical the decarbonisation of buildings is as part of that. However, it is my desire to see this actually work and be feasible in the real world that means that I have to pause the work today. Unfortunately, I can take from Patrick Harvie’s contribution only that he is happy to speculate on something as critical as how we heat our homes and what it costs homeowners and renters and for the Government and the Parliament to legislate without full understanding of what the UK Government intends to do about the cost of bills. To me, that is unacceptable.
The cabinet secretary has the nerve to stand here and claim leadership on climate, when she is delaying the very bill that is supposed to be tackling the issue. She boasts that she has taken action on thousands of homes, when, in fact, we have millions of homes in Scotland. Truly, that is a drop in the ocean. When will the cabinet secretary stop blaming everyone else and accept responsibility for this humiliating climb-down?
That is quite unnecessary rhetoric from Willie Rennie—not for the first time. [Interruption.]
Let us hear one another.
What the Government is proposing today is a sensible, reasonable and pragmatic response to the fact that a UK Government—to be fair to it—intends to bring forward a warm homes plan. We understand that the plan will seek to rebalance the cost of electricity relative to gas, which is critical to this work. However, I do not know what is in the plan yet. Despite Scottish ministers repeatedly asking what is in it, we still have no clarity.
As a Government and as a Parliament, we should not be prepared to make laws that affect the people of Scotland when we are not in receipt of information on the full policy landscape. For want of a few more months, I think that the people of Scotland can understand their Government and their Parliament waiting to make sure that we have the full information in front of us before passing laws.
A new report by the Edinburgh Climate Change Institute reveals that the deployment of zero-carbon networks and energy efficiency upgrades across Edinburgh, Midlothian and East Lothian could generate up to £2.1 billion in combined environmental and social benefits over the next 25 years. Lothian Heat CIC has now been established as a community interest company to lead that network on a regional basis. It brings together community groups from Edinburgh, Midlothian and East Lothian. It is a visionary infrastructure project to deliver clean, affordable heat across the Lothians by capturing local waste heat and renewable energy and delivering a heat network under a community-led, not-for-profit model. What support can be given to Lothian Heat CIC and other community-led networks to maximise benefits for our communities?
I welcome the ECCI report, which demonstrates the economic importance of heat networks. The Government is very seized of their importance and part 3 of the draft bill is entirely dedicated to that area.
Across Scotland, we estimate that heat networks could account for around 20 per cent of heat demand in the future. Those networks will be a key technology as part of the mix of decarbonisation options that we foresee for Scotland. The member will know that, through our heat networks fund, we are supporting the deployment of heat networks across Scotland. That is not something that has to await primary legislation. Again, I draw Parliament’s attention to the extension of our loan and grant scheme for connections to heat networks, particularly in rural areas, which I announced in my statement.
The cabinet secretary referred to energy market reforms, spiralling energy costs and fuel poverty in her statement. Does the cabinet secretary agree with me—and not her predecessor—that the floor for the transmission demand residual should be removed in order to lower bills for Scots?
Given the technical nature of Maurice Golden’s question, I think that I would be much more able to put the detail to him in writing, as opposed to in the Parliament today.
I recognise that demand for the Scottish Government’s heat in building schemes has risen in recent years. Can the cabinet secretary provide more detail on the support packages that are available for households that are looking to move to clean heat? Can she advise members on how much funding the Scottish Government has allocated to those schemes in this parliamentary session thus far?
I have said on a number of occasions that the total amount is about £1.67 billion, but it might be helpful if I expand slightly on how I would suggest that households move to clean heat or work to improve their energy efficiency.
Home Energy Scotland is an excellent first port of call, offering free and impartial advice on energy efficiency, renewable heating and fuel poverty support in Scotland. Warmer Homes Scotland provides grant-funded installation of measures such as insulation and heating systems for eligible households, which helps to cut bills.
I have mentioned a number of times our grant and loan scheme, which provides grants and interest-free loans to help homeowners to install energy efficiency measures.
I must also mention our area-based schemes and our social housing net zero fund, which help to accelerate energy efficiency and clean heat projects across communities for domestic properties, ensuring the progress at scale that is needed to complement our other schemes.
That concludes the statement. I will allow a moment or two for members on the front benches to reorganise before we move on to the next item of business.
Previous
Topical Question TimeNext
Alexander Dennis Ltd