Fuel Poverty
The next item of business is a statement by Nicola Sturgeon on fuel poverty. The cabinet secretary will take questions at the end of her statement, so there should be no interventions.
This statement will underline the Scottish Government's commitment to tackling fuel poverty and outline the measures that I intend to take to meet that objective.
It is important to say at the outset that there is more to our efforts to tackle fuel poverty than the central heating programme. For example, the warm deal has, since 1999, delivered investment of almost £80 million to provide advice, insulation and draught proofing for nearly 280,000 households. However, the lion's share of the resources that the Scottish Government devotes to tackling fuel poverty—£40 million of the £46 million a year—supports the central heating programme, and it will therefore be a central focus of my statement.
Since the central heating programme was introduced in 2001, central heating systems have been installed in nearly 100,000 homes in the private and public sectors at a total cost of £300 million. In the financial year that has just ended, the Scottish Government achieved a record number of 14,377 central heating system installations in the private sector. That is an impressive record of achievement by the current Government and the previous Administration.
It is now time, however, to take stock and consider whether the central heating programme is meeting its core objective of reducing fuel poverty. If we conclude that it is not, we must ask how it can be reformed to make it more effective. The obligation to tackle fuel poverty is, after all, not optional for the Government: we are obliged by statute to eradicate fuel poverty by 2016 as far as reasonably practicable.
I take that responsibility very seriously, which is why I am reconvening the Scottish fuel poverty forum, with the key stakeholders in the area and a new independent chair. I will say more about the composition and role of the forum later in my statement. However, I make it clear that I am tasking it to examine the central heating programme and to make recommendations for taking it forward in a way that tackles fuel poverty more effectively. I am setting a tight timetable for the forum—I have asked it to report back to me in the autumn. I will, of course, report back to Parliament at that time.
In order to assist the forum with its work and to ensure, I hope, that there is a well-informed debate, I am today publishing the Government's review of fuel poverty. The facts that the review reports should make us all pause for thought. In 2002, just after the central heating programme was introduced, 286,000 households in Scotland were living in fuel poverty. By 2006, the last year for which official figures are available, that figure had almost doubled: 543,000 households—or, to put it another way, one in four of all Scottish households—were living in fuel poverty. That is simply unacceptable, and it should tell all of us that change is needed.
It is true that that increase is due in part to massive hikes in energy prices and in part to general levels of poverty in our country, and to the failure of the tax and benefit system to address that poverty. Analysis of the reduction in fuel poverty between 1996 and 2002 showed that half the reduction was due to rising incomes, a third to lower fuel prices and the remaining 15 per cent to better energy efficiency of housing. We can assume that recent rises in fuel prices are now the dominant cause of the increases in fuel poverty that we have experienced in recent years.
There is no doubt that, with more powers for this Parliament, we could tackle the two most important causes of fuel poverty more effectively, through having more control over benefits and more influence over how energy markets are regulated. However, although we will continue to do what we can in those areas, our current powers allow us to focus only on the third of the three solutions to fuel poverty—improving energy efficiency. That makes it all the more vital that the action that we take is as effective as it can be.
The evidence from the review suggests that the central heating programme is not tackling fuel poverty as effectively as it could. It indicates that more than half of the household groups that primarily benefit from fuel poverty programmes are not fuel poor. Conversely, many of those who are fuel poor are not eligible under the current central heating programme. The consultation that we are undertaking on how to tackle poverty, inequality and deprivation has identified a range of priority groups, such as families with young children or those with disabilities, who are excluded under the current programme.
The programme has changed significantly over its lifetime. It was originally about giving older people who had never had one a central heating system. Now, the vast majority of installations are replacements of existing systems that have broken down or are inefficient. First-time systems have fallen from 91 per cent to 7 per cent of the total number of installations. Replacement systems give less carbon savings and less fuel bill savings.
The changing nature of the programme over the years also raises questions about its sustainability. Although we installed a record number of systems last year, there was demand for more than half as many again. Looking ahead, the rise in the number of pensioners and the average lifespan of central heating systems suggest that we could face demand for 40,000 replacement systems each year in the future. We would have to quadruple our current investment to meet that level of demand.
That might be an arguable position to take if we knew that all the money would contribute to reducing fuel poverty, but when we know that it would not, we must conclude that reform is a more sensible option. To put it bluntly, too much of the money that is invested in the central heating programme does not help the fuel poor. If we are serious about assisting the fuel poor—I hope that all members are—we need to overhaul the current programme and set it on a course that ensures that, once again, helping the fuel poor is at the heart of the programme.
That echoes the views that I have been made aware of by many of the key stakeholders in the area. I received a letter in January from a range of organisations, including Energy Action Scotland, Citizens Advice Scotland, Help the Aged, Friends of the Earth, the Scottish Federation of Housing Associations and Shelter, which stated:
"the current programmes are not targeted effectively at fuel poor households and are failing in their primary goal of eradicating fuel poverty."
I therefore want the Scottish fuel poverty forum to advise me on how to refocus the policy and better use the resources that are available to achieve the target of eradicating fuel poverty.
I have today sent out invitations to the key stakeholder groups, including, among others, those that I mentioned previously, asking them to meet next week under a new independent chair, the Rev Graham Blount. He is well known to many members for his work as parliamentary officer for the Scottish churches and as secretary to the cross-party group on tackling debt. I have no doubt that he will do an excellent job.
I am keen to hear the forum's advice on a number of specific areas: targeting of the programme, rural fuel poverty measures, the use of renewables systems and delivery options. As I said, the forum will report to me by the autumn and I will report back to Parliament.
I intend that, subject to Parliament's approval, the forum's recommendations will be implemented from the start of the next financial year, 2009-10. To make that possible, we must make decisions now about our priorities for the remainder of this financial year.
I make it clear that people who are currently on the programme waiting list will be unaffected by today's announcement. Their applications will be taken forward in the usual way and their central heating systems will be installed. Beyond that, I intend to ensure that, for the rest of this financial year, we focus our resources on the most vulnerable in our society—those who are most likely to be fuel poor. Therefore, as the First Minister has made clear on several occasions, all pensioners who do not have a central heating system in their homes will continue to be a priority. In addition, households where the heating system has broken down and with a member either over the age of 80 or in receipt of the guarantee element of pension credit will also be priorities for a replacement central heating system. Applications from people in other categories will continue to be considered, but they will be advised that their application will depend this year on available resources and, in the future, on the recommendations of the fuel poverty forum.
I am always happy to be proved wrong, but I have no doubt that my decision will be criticised by some Opposition members, although I expect it to be welcomed by a broad range of stakeholders, because they know that the tough decisions are often the right decisions—this Government will never shy away from that type of decision.
Not only will our priority this year allow us to move forward next year with the forum's recommendations, it will ensure that the resources that we invest in tackling fuel poverty do the job.
As we move forward, I want us to take an holistic view of how we can best tackle fuel poverty, including action on energy efficiency, energy prices and incomes. To that end, we are undertaking a wide range of measures to improve the energy efficiency of both social and private housing. We want to ensure that we are making best use of resources in that area, and that Government action complements action by others.
Under the carbon emissions reduction target—CERT—obligations, energy companies must reduce their carbon emissions. Scottish Gas, as managing agent, has contracted with Scottish Hydro Electric and E.ON to trade the carbon reductions brought about by the central heating and warm deal programmes. That will provide around an additional £1.5 million of funding to the fuel poverty programmes over the coming year. I will look to the forum to consider options on how best that funding can be used.
That is part of wider action that the Scottish Government is taking to ensure that Scotland benefits through CERT. I can also announce today that the Minister for Communities and Sport is establishing a new CERT strategy group, involving the energy supply companies. That group will develop and agree a strategy for improving the delivery of CERT action across Scotland.
However, in parallel with work on energy efficiency, we will do all that we can to address, within the constraints that I mentioned earlier, the other two key factors that affect fuel poverty, which remain reserved to Westminster—low incomes and high fuel prices. In London, at the Office of Gas and Electricity Markets summit on fuel poverty, the Minister for Communities and Sport put the case for further devolution of tax and benefits matters and for Scotland to be given more control over energy markets, so that we can do more to tackle fuel poverty in Scotland, including influencing customer fuel prices for the most vulnerable. He also argued that the United Kingdom-wide ministerial fuel poverty group should be reconvened, that we need transparency around CERT spending by energy companies in Scotland and that the Department for Work and Pensions should share its data on those who are most vulnerable to fuel poverty to help us better to focus our resources.
We look to the energy companies to do all that they can to address fuel poverty, through social tariffs and ensuring a fair deal for those who are on prepayment meters. For our part, we intend to do what we can to assist people in Scotland to apply for all the benefits to which they are entitled. One of the most effective parts of the current central heating programme has been the benefit health check that it offers to pensioners. In the past year, nearly 8,000 people were referred to the pension service, and many of them successfully applied for additional benefits to which they were entitled. We want to extend an equivalent benefit health check to all those who apply to the warm deal programme, and we intend to issue an invitation to tender for that work in the near future.
I want to leave members in no doubt that I and the entire Scottish Government are absolutely committed to fulfilling our statutory duty to take all reasonably practical measures to eradicate fuel poverty by 2016. However, we must face up to the reality that the programmes that we inherited, however well meaning, are no longer addressing fuel poverty effectively. We need to think radically about what we can do to tackle fuel poverty better. I have set out today a range of actions that we will take now and over the coming months to refocus the policy and help the fuel poor.
I commend this statement to Parliament.
I thank the cabinet secretary for sight of her statement, and for the review, which I hope the Local Government and Communities Committee will consider in more detail, to afford us a proper opportunity to understand its message.
Will the cabinet secretary confirm that her statement represents a significant shift in the Scottish Government's approach? I suspect that a civil servant somewhere might even have described it as "brave". It appears to fly in the face of the First Minister's commitment when he was challenged last year over whether the universal central heating programme was going to end. He said that it was not going to end, and that it was going to be enhanced. Will the cabinet secretary confirm that the Government's position is now that the central heating programme and its availability to all pensioners are now at an end?
Although I welcome the establishment of the fuel poverty forum under the wise chairmanship of Graham Blount, will the minister confirm that the forum's job is to consider how to target, that it is for her Government to decide whether it should target, and that that decision has already been made?
The statement tells us about a lot of things that the Government cannot do, but I want to ask about the things that it can do. Given the difficult circumstances with rising fuel prices, why has the Government flatlined the budget for the central heating and warm deal programmes rather than increasing it? The Government hands out £165 million per year to small businesses without attaching one condition, so why has it taken the view that the only way to target those who are in fuel poverty is to remove the entitlement from pensioners in general?
Finally, I have to ask about an issue of detail. Will the cabinet secretary clarify two small points about what happens now with the programme? What is the difference between a pensioner who is currently on the list and someone whose application is in the post and will be received tomorrow? What is the difference between a tenant who lives in a private sector flat whose central heating system has finally conked out and someone who does not have a central heating system at all, and what is the difference between how cold those two pensioners will feel?
I thank Johann Lamont for those questions. First, I will be happy to come along to the Local Government and Communities Committee to discuss the review in more detail. It would be a useful opportunity for me and the committee.
Johann Lamont mentioned, as I thought she might, the First Minister's comments in the chamber in response to Wendy Alexander, among others. Wendy Alexander asked the First Minister to confirm that
"every single pensioner in Scotland who is without a central heating system qualifies for the scheme."—[Official Report, 20 September 2007; c 1971.]
That is exactly what I have confirmed today will be the case, and Johann Lamont should have the grace to recognise that.
I agree with Johann Lamont that this is a significant shift in approach and I hope that it will be considered brave. When we have a system that means that fuel poverty rates have doubled in the past few years, and half the money that we are spending to tackle fuel poverty is not going to people who are fuel poor, I do not know about Johann Lamont, but I think that a brave approach is required, and the Government will take it. I remind Johann Lamont that the approach that I am taking has been called for by organisations such as Energy Action Scotland, Citizens Advice Scotland, Friends of the Earth, the SFHA, Shelter and Help the Aged. I therefore suggest that Johann Lamont is isolated, burying her head in the sand and refusing to face up to tough decisions.
Johann Lamont also asked about the budget. I confirm that the Government is maintaining the financial commitment to the previous Administration's programmes. Indeed, during the previous financial year, we contributed an additional £7 million to try to reduce the waiting lists and times for the central heating programme. After the forum has had the opportunity to do its work, we might want to have a debate about the appropriate level of resources that should be devoted to tackling fuel poverty, but I respectfully suggest to Johann Lamont that before we talk about increasing the budget, we all have a duty to ensure that the money that we are already spending is being spent effectively on tackling fuel poverty. All evidence suggests that that is not the case at the moment.
On Johann Lamont's points of detail, those who are currently on the list will have their applications honoured. Those whose applications come in after the date will be subject to the prioritisation that I have talked about. It is right that as an interim decision, until the forum completes its work—no restrictions have been put in place on what it can recommend—we have decided to target resources on those who are genuinely fuel poor. I would have thought that all of us could agree with that.
I thank the cabinet secretary for providing an advance copy of her statement.
Keeping our senior citizens warm and dry must be a continued priority of the Government, because it promotes wellbeing and dignity and saves the national health service money. I share the minister's concerns that more households will fall into fuel poverty as energy prices continue to rise. What progress is she making to redress the balance in the current unfair practice whereby low-income households that use prepayment meters end up paying more than £200 more than people on normal tariffs?
Scottish Gas has improved—judging by my mailbag—on Eaga's record in the Highlands and Islands, but it still has a long way to go. I welcome the minister's commitment to address the latest problems regarding Scottish Gas's failure to pay installers, but how does she intend to address the ever-increasing waiting lists, especially in remote and rural areas such as the Highlands and Islands, where the weather tends to be colder?
I am encouraged by the minister's words that the central heating programme will include some priority groups, such as fuel-poor families with young children, and disabled people, who are excluded under the present criteria. I am glad that she listened to Help the Aged and Shelter, which stated that the programme is failing in its primary goal of eradicating fuel poverty.
Will she ensure that solutions are flexible rather than broad brush, so that the scheme can cover applicants who require only a new boiler and do not need new radiators and pipes? Will she ensure that the £40 million is spent with the maximum of fuel efficiency to cure fuel poverty?
It is a sign of how things have changed that the Tories are more interested than Labour members are in tackling inequality and fuel poverty. [Interruption.] I am not saying that the Tories are any good at that, but they are better than Labour.
I share Jamie McGrigor's concerns about the unfairness that people on prepayment meters face. Such people do not have the same opportunities to shop around and change supplier, and they pay higher rates for fuel than anybody else. It is incumbent on the energy companies to do more to protect vulnerable customers. Interestingly, although the United Kingdom energy white paper stated that more must be done to protect vulnerable customers by imposing further obligations on the energy companies, the Energy Bill unfortunately contains no provisions that will do that. However, perhaps there is still time for the bill to be amended.
On Scottish Gas's delays in paying contractors, I know that Alex Neil was involved in a meeting with Scottish Gas and my officials last week about one particular contractor. Scottish Gas has an obligation to pay its contractors within 30 days of receipt of invoice. It is vital that that happens.
On waiting lists, I point out that we invested £7 million of additional money last year to try to bring them down. The number on the waiting list was reduced from almost 12,000 to the current level of around 9,000, which is welcome. However, the reason behind my making my statement today is that, until we reform the system and make it more sustainable by ensuring that it targets those who are in fuel poverty, we will not properly get on top of waiting lists. That is why we need to take the action that I have announced today.
On Jamie McGrigor's point about including different groups in the central heating programme, such as including boiler-only installations, that is exactly the kind of issue that I hope the forum will consider. I look forward to receiving the forum's recommendations in due course and to sharing them with Parliament.
I thank the cabinet secretary for the advance copy of her statement, although I am not convinced that the fuel-poor pensioners of Scotland would thank her for it.
The minister has finally let the cat out of the bag: her Government aims to restrict the central heating programme, which is one of our most valuable levers for tackling fuel poverty in Scotland. However, there are aspects of the minister's statement with which I agree, most notably the part of it about the reconvening of the fuel poverty forum, which the Liberal Democrats pushed for in our parliamentary debate in March. As part of the strategy on fuel poverty, will she or the fuel poverty forum consider changes to planning rules to make it easier to install micropower? Will they also consider the introduction of a local tax rebate and examine the benefits of developing a one-stop-shop approach to tackling fuel poverty?
I repeat that we need to reform the central heating programme. Our intention is not to restrict access to the programme by people who are deserving of such access, but to ensure that it is more effective in targeting people who are fuel poor.
Jim Tolson welcomed the re-establishment of the fuel poverty forum—I am glad that he did so—but he might want to reflect on the fact that, in January, all the stakeholders who were on the old fuel poverty forum wrote to me to ask me to take the action that I have outlined today. I have reflected the views of the experts, who think that it is time to review the scheme to ensure that it is better targeted.
Let me explain to Jim Tolson what I think is at the heart of the problem with the current scheme. We have a system in which people who are fuel poor are queueing in waiting lists behind people who are not fuel poor. Half the money that we spend is going on people who are not fuel poor. [Interruption.] I think that I heard Johann Lamont say from a sedentary position that we should just increase the budget. I appreciate that Opposition members have the freedom to say that, but surely—
The minister used to say it herself.
Des McNulty is absolutely right. However, my point is that, whether the budget remains at its present level of £40 million or whether it increases in the future, the key thing is that every penny of it should be spent on tackling fuel poverty. The Parliament has a statutory obligation to ensure that that is the case, which I do not intend to dodge.
I certainly hope that the forum turns its attention to issues such as micropower and renewables. I do not want to pre-empt its recommendations, but I am sure that it will examine closely proposals such as those that Jim Tolson made.
Before I call back benchers, for whose questions we have about 18 or 19 minutes, I remind them that they need to press their buttons if they want to ask a question and that they should only ask a question—I do not want questions to be preceded by preambles, because that will stop colleagues getting in.
Jamie McGrigor has told us about the problems that are associated with prepayment meters, particularly for people who are in fuel poverty, and the extra costs to which they give rise. The use of smart meters allows people who are on tight budgets to budget in the same way that they can budget with prepayment meters without incurring extra costs.
What steps will the Scottish Government take to push the Westminster Government to ensure that the use of smart meters is expanded throughout Scotland and that particular emphasis is placed on targeting people who live in fuel-poor households?
Joe FitzPatrick puts his finger on an extremely important point. We have already touched on prepayment meters. The ability to budget week by week is important for people who live on low incomes. I am sure that people would not want to lose that facility, but we must do more to ensure that the situation is much fairer than it is at the moment. The Parliament has debated the arrears that have accumulated because meters were not recalibrated as fuel prices rose, and I have a great deal of sympathy for the calls that were made on the fuel companies not to seek to recover those arrears.
In addition, people who have prepayment meters pay a higher cost for their fuel than people who pay by other methods. I am extremely disappointed that the United Kingdom Government did not follow through on some of the rhetoric of the energy white paper. The Energy Bill is completely devoid of any provisions that would impose obligations on energy companies in respect of the needs of their most vulnerable customers. I assure Joe FitzPatrick that the Minister for Communities and Sport has been making that case strongly to UK ministers and that we will continue to do so.
The cabinet secretary has said that she wants more control over the regulation of energy markets to help Scottish consumers, while the First Minister wants to change the electricity transmission charging regime to benefit Scottish producers. Both those objectives are desirable, but does the cabinet secretary accept that the current electricity transmission charging regime is designed to reduce costs to consumers in direct proportion to their distance from London? Will she therefore discuss with consumer representative organisations the impacts on fuel poverty of any changes to that regime? Will she also ensure that the issue is considered fully by the Scottish fuel poverty forum when it is set up?
I can give those assurances. Consumer groups have a key interest and I certainly want the fuel poverty forum to examine those issues.
In response to Lewis Macdonald's first point, the key and consistent theme in the First Minister's and my positions is that we both want more control over our resources in Scotland, because it is absolutely shameful that, in oil-rich Scotland, one in four households lives in fuel poverty. The Government is not prepared to accept that situation.
The statement indicated that all pensioners who do not have a central heating system in their homes will continue to be a priority under the revised scheme. Will the cabinet secretary clarify that? Does she mean only people who are pensioners as of today—that is, persons who were born on or before 22 May 1948—or does she mean people like me, who are not yet 60 years of age but who hope to attain that lofty status, and that the relevant factor is being a pensioner at the time of application? Will she advise me which it is?
David McLetchie should have declared an interest at the outset of his question. Without wanting to say too much about his personal circumstances, I am sure that he will cope with his central heating needs.
My announcement on the prioritisation of the waiting list applies to this financial year only. Therefore, in this financial year, the prioritisation will apply to anybody who reaches the required age at any point during the year. The future arrangements will flow from the recommendations of the fuel poverty forum, the establishment of which I announced earlier. I am not restricting the forum's remit, because I want it to come up with recommendations that it believes will better tackle fuel poverty and ensure that the resources that we have committed and will commit to the issue contribute genuinely to the eradication of fuel poverty. I hope that that answers David McLetchie's question.
I, too, welcome the establishment of the fuel poverty forum. I look forward to hearing its recommendations on rural fuel poverty measures, given the astronomical cost of fuel in my constituency. What specific discussions has the Government had with the Office of Gas and Electricity Markets about Ofgem's proposals for a windfall tax on energy companies from the emissions trading certificates to help fund measures to alleviate fuel poverty? What representations has she made, or have her colleagues made, to UK ministers on how that potential £9 billion fund could be used best to reduce fuel poverty in Scotland?
The Minister for Communities and Sport raised those issues with Ofgem and the UK ministers at the fuel poverty summit a few weeks ago. I am more than happy to ask Stewart Maxwell to write to Liam McArthur with more details of the content of that discussion.
In my statement, I referred to our desire to ensure that Scotland gets its fair share of the CERT system. As Liam McArthur is aware, and as came through in evidence from stakeholders to the Local Government and Communities Committee, there is a feeling that Scotland did not get its fair share from the predecessor to the system and that we are not on course to get our fair share from the present system. If we get our fair share, we could be looking at about £80 million for energy efficiency savings and about £60 million for reduced bills for householders. That is why we have established the CERT strategy group that the Minister for Communities and Sport will work on.
I commend to Liam McArthur the Government's review of fuel poverty. He is particularly interested in the needs of rural communities. A valuable feature of the review is that it starts to point us to the groups of people and the geographic areas in which fuel poverty is most acute. There is no doubt that there is a pressing need in rural areas, which is why that was one of the specific issues that I mentioned when I outlined the issues that the fuel poverty forum will consider.
I am grateful to the cabinet secretary for the advance copy of the statement, and I wish Graham Blount well in his role. I am sure that he will be an excellent chair.
However, I am puzzled about one thing. How is it that, when ministers whose portfolios include energy and climate change repeatedly make predictions in this chamber about peak oil and relentless rises in energy prices, today's statement included only one thing about renewables—that the cabinet secretary wants to hear people's views? Is it not already abundantly clear that we have to get the right renewables kit into the right places, in tens of thousands or even hundreds of thousands of homes across Scotland?
Is it not the case that local authorities down south are not waiting for Government action but are cracking on and getting things done? Does the cabinet secretary agree that such renewables initiatives will have a central role in reducing energy demand, climate change emissions and household bills?
I agree whole-heartedly with Patrick Harvie—renewables have to play a central role in what we are trying to achieve. That is a given, and I hope that all members in the chamber would consider it as a given.
I am asking Graham Blount and the fuel poverty forum to consider how we can better use the resources at our disposal in order to tackle fuel poverty and boost the use of renewables. That will be an important part of the work that we are asking the fuel poverty forum to do. I look forward to the continued contribution of Patrick Harvie and his colleagues as we take the work forward.
I welcome the cabinet secretary's statement.
At the beginning of this week, a hearing opened at the UK Parliament into competition in the UK energy sector. Allan Asher from energywatch gave evidence to a parliamentary committee and condemned some of the energy companies and the oligopoly in the energy market. Does the cabinet secretary agree that energy companies are continuing to hike up prices to maintain their profits at the same time as households are being penalised by the increases? The calculation of fuel poverty is based on the energy expenditure of each household each week. If the energy companies continue to increase their prices, the effect will be felt by many more households and families. We will have to analyse the effects of that, taking into account fuel poverty and household poverty.
I suggest that John Wilson take the opportunity to look at the Government's review, which I understand is now in the Scottish Parliament information centre. In it, he will read confirmation of what he has just said—that rising fuel prices are having an impact on fuel poverty. Like Stewart Maxwell, I have no hesitation in saying that energy companies have an obligation to do more to protect our most vulnerable citizens. I repeat my call for the companies to do so.
I said this as part of my statement, but it bears repetition. After the UK energy white paper, hopes were high that some legislative statutory steps would be taken to increase the obligation on energy companies. However, such an obligation has not appeared in the UK Energy Bill. I am very disappointed about that and we will continue to press for more action from the Westminster Government, whose responsibility it is.
I thank the cabinet secretary for her statement. I remind her that the central heating programme was not just about fuel poverty. It was also about social equity for older people in Scotland.
For the benefit of the Parliament, will the cabinet secretary expand on the categories of people who qualify at present for a central heating system or a replacement system but who, according to this afternoon's statement, will no longer be a priority? How many people will lose out as a result of the radical shift in policy?
I welcome the cabinet secretary's conversion, like a penitent at the stool of universality and targeting—and I thank her for that—but how does she square the language that she used this afternoon with the language that she used in the recent debates on prescription charges in this very chamber?
One in four of all Scottish households lives in fuel poverty. When we talk about an issue as enormous, in the challenges that it poses, as tackling fuel poverty, I think that any sensible socialist—or social democrat, or whoever—would want to ensure that every penny of the money that we spend on tackling fuel poverty actually goes to the people who live in fuel poverty. I make no apology for feeling that way.
I agree with Frank McAveety that social equity, as well as tackling fuel poverty, was a factor in the central heating programme, but if the member checks he will find that the programme's central aim was to tackle fuel poverty. I do not believe that the programme in its current form is tackling social inequity, just as it is not tackling fuel poverty as effectively as it could do.
As I said, we intend to ensure that pensioners who do not have a heating system, pensioners over 80 and pensioners in receipt of the guarantee element of pension credit whose system has broken down will continue to have systems installed. Those who have partial or inefficient systems can apply for assistance in this financial year, and we will install as many new systems as possible. However, it is important that we get the programme back on track, so that it delivers, is sustainable and reduces fuel poverty. I hope that all members will be able to sign up to that.
I was delighted that in her statement the minister made clear that £1.5 million is likely to be generated in the coming year for use in tackling fuel poverty under the CERT schemes. However, I am worried by the fact that in a subsequent answer she mentioned some big numbers and suggested that that money might be being withheld inappropriately from Scotland. How much of the target amounts that she mentioned is likely to be generated by schemes over the coming years, and how much is simply pie in the sky?
The £1.5 million to which I referred is the money that we expect to receive in this financial year from the trading of carbon savings made under the existing central heating and warm deal programmes. As I said, the fuel poverty forum will provide us with suggestions on how we can use the money. The other sums that I mentioned are the potential benefits that are available to Scotland if we ensure that we get our fair share of resources from the CERT obligations on energy companies to assist energy users to achieve energy savings. I would not use the term "pie in the sky", but at the moment we are not getting much of that money. There is the potential for households to get up to £80 million in energy efficiency measures, leading to around £60 million in reduced energy bills. It will take a great deal of work and effort for us to realise that potential. That is why we have set up the CERT strategy group that I announced in my statement.
As the cabinet secretary mentioned in her statement, one of the main causes of fuel poverty, alongside rising energy bills, is poverty itself. Can she provide further details of the action that is being taken to ensure that those who are in poverty at the moment and will be in poverty in the future, given the continued rise of fuel poverty, are accessing all the benefits and winter fuel payments to which they are entitled? My question relates especially to pensioners.
Shirley-Anne Somerville's point is on the button. As I said in my statement, energy efficiency and rising fuel prices have an impact on fuel poverty, but incomes and poverty are at the heart of the debate. Shirley-Anne Somerville knows that we are consulting on a new anti-poverty strategy, because we need to up our game to lift children, pensioners and others in Scotland out of poverty. The Government is committed to taking that action. Benefit take-up is important. Statistics suggest that perhaps as many as half of pensioners who are entitled to pension credit do not get everything to which they are entitled. We know that some pensioners do not claim council tax benefit. We are committed to working to address the issue, preferably with the Department for Work and Pensions. Regardless of that, we will do everything in our power to encourage benefit take-up and to ensure that the income of people in Scotland is maximised.
As I listened to the point in the cabinet secretary's statement about targeting, my mind went back 25 years. The only difference was that Mrs Thatcher had acquired a Scottish accent, which was strange. Will the cabinet secretary confirm that the amount that has been allocated to the central heating programme over the next three years will decline in real terms and that she is handing the fuel poverty forum a poisoned chalice?
I point out to Lord George Foulkes that, under the current programme, many members of the House of Lords would qualify for free central heating. That makes my case that we need to make the programme much more effective.
The budgets are not reducing; we want to ensure that we get effective use of the budgets. That is a necessary first step—in any case—to ensure that we get value for taxpayers' money. I remind George Foulkes, as I reminded other members, that the people who said that the
"current programmes are not targeted effectively at fuel poor households and are failing in their primary goal of eradicating fuel poverty"
were Energy Action Scotland, Citizens Advice Scotland, energywatch, Friends of the Earth Scotland, the Scottish Federation of Housing Associations, Shelter Scotland and Help the Aged. Even if George Foulkes is not prepared to listen to me—given how he shouts in the chamber, it seems that he is not prepared to listen to many people—he should listen to the experts, because he might learn something.
There was a lack of specifics in the statement. The minister said that too much of the money that is invested in the central heating programme is not helping the fuel poor, but she could not give us detail about which parts of the programme she thinks are ineffective and who will be most directly affected by the new arrangements.
Will people who are aged between 75 and 80, who are currently priority cases for replacement central heating, no longer be regarded as priorities under the new administrative arrangements? If money is released because people will no longer qualify for a central heating system, what alternative provision will there be to address fuel poverty? For example, emphasis could be placed on combined heat and power schemes, which would have a practical impact. May we hear more about alternative uses for resources to tackle fuel poverty?
I agree with Des McNulty's final point, which was constructive. That is exactly the kind of issue that the Scottish fuel poverty forum is being asked to consider. We must consider not only who is eligible for support but what we deliver with the resources that we have, to ensure that we get the best use of resources.
Des McNulty asked for more detail about the proportion of resources that are not tackling fuel poverty. I appreciate that members have not yet studied the review that we published today, but I am sure that Des McNulty will read it when he gets an opportunity to do so. The review suggests that perhaps half the resources that we currently spend are not going to the fuel poor.
As I made clear, all pensioners who do not have a central heating system will continue to be priorities, and all pensioners over 80 and all pensioners over 60 who are in receipt of the guarantee element of pension credit whose central heating system has broken down will continue to be priorities. That does not mean that nobody else will get a central heating system; it means that we are targeting our resources on the people who are most in need. I would have thought that all members would have applauded that.