Fuel Poverty
The next item of business is a debate on motion S4M-05424, in the name of Margaret Burgess, on tackling fuel poverty.
14:41
I welcome the opportunity to reconfirm to the Parliament the Scottish Government’s commitment to tackling fuel poverty. The most recent fuel poverty figures for Scotland, which were published in December 2012, show that Scottish Government action is mitigating swingeing fuel price increases. Despite punishing 14 per cent increases in autumn 2011, improved household energy efficiency prevented 35,000 households from falling into fuel poverty.
However, it gives me little comfort that 684,000 Scottish households were in fuel poverty in October 2011. Without improvements in the energy efficiency of homes and a small increase in household income, many thousands more households would be in fuel poverty. The statistics show that income growth brought fuel poverty down by 2.2 per cent and that energy efficiency improvements brought it down by 1.5 per cent. However, the increase in fuel prices put fuel poverty up by 4.7 per cent, which cancelled out much of what we had achieved.
Our target to eradicate fuel poverty as far as is reasonably practicable by 2016 remains challenging, given that it is predicted that energy prices will continue to rise. However, we will not shy away from striving to make energy bills more affordable. Nor will we redefine fuel poverty, as Westminster seeks to do, by reclassifying poor households as too poor to be fuel poor.
I spoke to a constituent, the week before last. She is in her 70s and she worked all her life from the age of 15. She has a small pension from her work and a state pension; her total income is just under £200 a week. She is struggling to make ends meet. The fuel company asked her to increase her direct debit, but she is currently spending 17.8 per cent of her income on fuel. That is simply not acceptable in 21st century Scotland. My constituent’s experience starkly illustrates why the Parliament needs the powers to tackle a situation that is a disgrace in an energy-rich nation such as ours.
In autumn, all the large energy suppliers announced price increases of between 7 and 10.8 per cent. The Deputy First Minister is meeting each supplier to express concern about energy price rises, press for action to protect vulnerable consumers and secure suppliers’ commitment to investing in Scotland’s national retrofit programme.
Specifically, we are asking the energy companies to commit at least a pro rata share of energy company obligation targets for Scotland, based on their market share; to tell us what further steps they intend to take to assist vulnerable households; to automatically switch vulnerable customers to the lowest tariff; to implement as soon as possible the Office of Gas and Electricity Markets retail market review proposals that were published in October; and to continue funding for energy best deal plus roll-out throughout Scotland.
Tomorrow, I will host a summit in Scotland jointly with Ed Davey, Secretary of State for Energy and Climate Change, and Michael Moore to seek further solutions from the big energy companies. I am sure that the Parliament will support me in urging them to do more for struggling families in Scotland.
However, the most sustainable way in which to tackle fuel poverty is by raising the energy efficiency of homes, thus providing greater comfort and lower bills.
Is the minister aware that there are older people who are being cold called by companies that are not approved installers of the Scottish Government’s insulation schemes, which exist across the country? What more can the Scottish Government do to publicise the Energy Saving Trust’s advice helpline so that older people in particular can receive free, expert and impartial advice?
I thank the member for that question, which concerns a matter that I have already taken up with the Energy Saving Trust and officials. There is a real concern that vulnerable people are losing out because they are being cold called; they are frightened and do not trust who calls them. We are looking at how we can ensure that we get the message through to such people. For example, trusted intermediaries or organisations can be used, or someone whom a vulnerable person knows and can trust, so that they know that what they are being offered is genuine. We certainly do not want anyone to lose out simply because they are afraid to take up what has been offered. The cold calling causes me some concern in that regard, so I have been looking at it.
We announced last month that there would be £27 million for national retrofit pilots to transform more than 2,200 older, colder properties across Scotland. Scottish Government investment of £3.5 million will lever in a further £13 million from major utility companies. The projects will also support an estimated 150 jobs across Scotland.
I have spent quite some time over many years trying to persuade the Government to adopt a national approach to retrofitting the housing stock for energy efficiency. When will the national retrofit programme be truly national, instead of our seeing pilot after pilot? We have been looking at pilots for years.
We introduced the pilots because of the Department of Energy and Climate Change’s delays in telling us how the energy company obligation will work and how to leverage in the money. What we have done through the pilots is a step forward. However, we hope that we will have the arrangements with DECC soon. Part of tomorrow’s discussion will be about how we can get that moving. We are not holding back the arrangements; they are being held back by DECC and the United Kingdom Government.
The national retrofit programme will have an initial focus on areas of fuel poverty and related deprivation across Scotland. It will be delivered by local authorities because they are best placed to direct such schemes, given their knowledge of the communities that are in greatest need. The programme will prioritise fuel-poor areas and cover the whole of Scotland in around 10 years.
Does the minister agree with the Energy Saving Trust’s view that, although there is a need for the national retrofit programme, there is also a need for a successor to the energy action programme so that vulnerable people in communities that are not part of the retrofit programme do not have to wait for significantly long periods for their needs to be met?
I was coming to that point on the next page of my speech. We are aware of the Energy Saving Trust’s view in that regard. The Government and I are keen to ensure that people do not lose out in the way described, so we are actively looking at a programme for vulnerable groups who do not fit into the national retrofit scheme. We have taken that on board and we have consulted the Energy Saving Trust, which is happy with what we are doing.
The majority of the Scottish Government’s fuel poverty budget goes to the energy assistance package, which Elaine Murray just mentioned, and most of the money allocated to that is used to fund central heating and insulation measures for households at risk of fuel poverty. The EAP was designed to integrate with the previous carbon emission reduction targets, which have now been replaced by the energy company obligation. Elaine Murray asked us to ensure that vulnerable people do not lose out and we will do that.
From April, the Scottish Government’s energy assistance package will be superseded by the national retrofit programme, which is designed to get the most for Scotland out of the energy company obligation. The majority of the £65 million fuel poverty budget for 2013-14 will go to local authority area-based schemes.
The Scottish Government is committed to continuing to provide the home energy Scotland hotline and the energy advice, tariff and benefits checking that form stages 1 and 2 of the energy assistance package. The home energy Scotland hotline will integrate with the national retrofit programme. It will provide a route into the support for vulnerable households that are outside area-based schemes, as well as directing households within the areas served by local authority schemes to those schemes. As I said, we have not made a final decision on the best means of providing support to vulnerable households.
There are a number of issues around rural areas. A number of funds can support the development of renewable options for individuals and communities in off-gas areas. They include the warm homes fund, the community and renewable energy scheme and the home renewables loan scheme. Those schemes are designed to fit with the United Kingdom financial framework for supporting domestic renewable energy and are aimed at supporting a range of applicants, including individuals, community groups, rural businesses and registered social landlords.
We proposed a community-based approach to tackling fuel poverty in our 2011 manifesto, which earmarked £50 million over the course of this parliamentary session for a warm homes fund to promote district heating and renewables options. The first project, which is supported by the warm homes fund, is at West Whitlawburn, in Cambuslang, which I hope to visit soon. The project is expected to become operational in July 2013. We have other schemes in the pipeline that we hope to announce shortly. RSLs will use the income received from the UK schemes to promote renewable energy to improve the energy efficiency of housing and give people warmer homes.
District heating networks can provide low-cost heat to households, particularly in multistorey blocks and off-gas-grid areas. Heat networks mean that we can use heat more efficiently from a range of sources such as gas-fired combined heat and power plants, renewables, and heat recovery from industrial processes.
Fuel poverty is a blight on our country. This Scottish Government will continue to urge the UK Government, which has responsibility for this area, to do more to drive down energy costs and ensure that our households are better protected. However, members of this Parliament—and the people of Scotland—can be assured that their Scottish Government has done and will continue to do all that it can within our existing powers to tackle the scourge of fuel poverty.
I move,
That the Parliament recognises the Scottish Government’s efforts in tackling fuel poverty; welcomes the continued investment in energy efficiency and fuel poverty and the contrast with the UK Government’s cutting of its fuel poverty budget and withdrawal of any taxpayer-funded support from April 2013; recognises the early indications from the National Retrofit Programme “go-early” pilots that energy companies view Scotland as an attractive place to invest; notes the economic benefits of such programmes and the contribution that they make to reducing carbon emissions; supports the Scottish Government’s call on the UK Government to tackle the energy market to provide a better deal for consumers, and notes with concern the expected impact on household incomes arising from the UK Government’s welfare reform plans, which it believes will lead to an increase in inequality.
14:53
The recent severe weather conditions and freezing temperatures remind us of the acute need to tackle fuel poverty in Scotland. We live in a time of increasing fuel bills and fuel poverty, and still too many of our homes are poorly insulated. Nearly one in three households in Scotland lives in fuel poverty and behind that sad statistic are families, particularly those on the lowest incomes, who are simply unable to afford to heat their homes properly.
Too many of our older people are left to choose between heating and eating. From my time working at Help the Aged, I am acutely aware of the impact of fuel poverty on our older people and the all-too-high levels of excess winter deaths in Scotland.
The scale of the challenge is clear and it is right to ask if enough is being done to tackle it. Of course, the backdrop of UK Government policy is not helpful to the work that is done in Scotland to address fuel poverty. We readily acknowledge the impact that welfare reform proposals will have on the poorest households and the need for far more robust regulation of the energy industry to curb energy companies hiking prices for customers while increasing their profits.
Energy companies have an important role to play—a point that I will return to—but, nevertheless, the Scottish Government also has substantial capacity to take action on fuel poverty. Therefore, it is right to focus on what can be done now through this Parliament. We have already heard today that it is a scandal that, in energy-rich Scotland, we have fuel poverty. That is, of course, true. However, we believe that it is a scandal that anyone in the UK—and, indeed, beyond—should live in fuel poverty. We want the UK Government to take a different course, but it is also incumbent on the Scottish Government, particularly given that it aspires to further powers, to use those powers that it already has to their full extent to tackle fuel poverty in Scotland.
Although we undoubtedly support some actions that ministers have taken, including the principles of the national retrofit programme, we believe that further action is required, given the context of rising fuel poverty. We are not alone in believing that, as members will see from the excellent briefings that we received ahead of today’s debate. Some of the issues that I wish to speak about have also been highlighted by Energy Action Scotland, WWF Scotland, the Scottish Federation of Housing Associations and others.
As I have stated, we support the proposal for a national retrofit programme for many of the reasons that Patrick Harvie highlighted in his intervention. We see many benefits to the scheme, not only because it will improve the energy efficiency of more of our housing stock but because it will support jobs in our construction sector in these tough times for our economy.
Improving our poor housing stock has long been a priority for the Labour Party. We believe that more energy-efficient homes and reducing energy usage must be the key goals in tackling fuel poverty and, in doing so, contributing to the goal of reducing carbon emissions. That is why we have made housing the key priority in our budget proposal. We believe that our proposal will result in not only more affordable homes, but homes that are built to a higher standard of energy efficiency. Our proposal would also allow greater investment in retrofit schemes. Our priority for housing is why we supported a green new deal at the last election to insulate some 10,000 homes.
Of course it is right that we welcome the retrofit programme that ministers have introduced, but more action is required. Only last September, the Scottish Government’s approach was described as “inadequate” by the expert on fuel poverty, Dr Brenda Boardman. Although the Scottish Government’s budget for fuel poverty is stable in the current spending review, three years ago the budget was subject to a two-thirds cut, which has been a costly mistake.
Many members will be looking forward to the Energy Action Scotland Burns supper. I am told that Burns once wrote to his publisher that he had three guineas to carry out his work as an exciseman when it really required five. Ministers find themselves in a similar situation with their plans for addressing fuel poverty, given the funds available. We must have clarity about funding. We know that, of the Scottish Government’s £200 million budget for energy efficiency and tackling fuel poverty, almost two thirds will come from the energy companies—
That is a good thing.
That should indeed be a good thing, as the minister has chosen to say from a sedentary position, but that is why we call on ministers to provide an update to Parliament on the progress of negotiations with the industry to secure those funds. If the minister wishes to provide that update now, that would be very welcome. If those funds are not secured, clearly that will raise significant question marks over the delivery of the strategy. We must hope that energy companies will recognise their responsibilities to contribute to the work on fuel poverty when they are in dialogue with ministers on the issue.
It is also welcome that Scottish Government funding has been provided for the go-early projects, which have had significant take-up among local authorities. However, I would like more information from ministers on what private investment has been secured for those schemes. I understand that the minister gave a figure in her speech, but it would be good to know whether that figure refers to what has actually been secured. That may well be an indicator of what funds can be levered into the national strategy.
There are questions about when the rules on the operation of the green deal—for example, on the occupancy assessment that will be required—will be concluded in Scotland. It would be good to hear from the minister about what progress has been made on that.
Although we welcome the national retrofit programme, I am conscious of the advice of Energy Action Scotland, which argues that, while the retrofit scheme will be important, there will remain a need for a programme similar to the energy assistance package to ensure that the most vulnerable households who live outside the retrofit programme zones will not need to wait years for help. I welcome the assurance that the minister gave to Dr Murray on the continuing eligibility for assistance of those who are currently eligible under that scheme.
Those general points reinforce the importance of ministers producing further details on how the national retrofit programme will be rolled out. We want more avenues for tackling fuel poverty to be explored, including looking at initiatives such as the collective purchase of energy by communities to bring down costs and further pioneering schemes such as the provision of community heat networks in Aberdeen, to which the minister referred.
In 2001, the Parliament made a commitment to abolish fuel poverty by 2016, and the Scottish Government has rightly and consistently said that it will abide by that commitment. Indeed, earlier this month in response to a question from me, the Cabinet Secretary for Infrastructure, Investment and Cities described that as not only as a statutory, but a moral, duty. Given that we have high levels of fuel poverty, which in the past year have unfortunately increased, it is right to ask what assessment ministers have made of their ability to reach the target that is now only three years away. Are ministers confident that their current plans are adequate to meet the target? Will they set milestones in a detailed published plan? Without that, the commitment will be no more than words. I am sure that no-one wants that; rather, they want a clear plan setting out what will be achieved and when.
The scale of the challenge on fuel poverty is clear, but the costs of not meeting that challenge are heavy indeed and are paid by the most vulnerable in our society. However, we have not only the power to deal with the issue, but the wealth of expertise and commitment from many charities and individuals working in the field who are passionate about tackling fuel poverty. They often meet and work with us here and, for those of us that work with them, that passion is very clear. I hope that the Scottish Government will give them the support that they deserve in carrying out that vital work; indeed, the energy companies should support them, too. However, it is clear from those who work day in, day out to tackle fuel poverty that a clearer lead is required from ministers: that is what our amendment calls for.
I move amendment S4M-05424.2, to leave out from first “the Scottish Government’s” to end and insert:
“that the most recent figures available show that 1 in 3 households in Scotland are living in fuel poverty and that fuel poverty in Scotland has increased; notes that, of the £200 million budget that the Scottish Government states that it has set for energy efficiency and tackling fuel poverty, almost two thirds is to come from energy companies and, therefore, calls on the Scottish Ministers to provide an update on the progress of negotiations with the industry to secure these funds; recognises the role that the energy industry has in addressing fuel poverty and notes that Scottish Labour has called for comprehensive reform of the regulation of the UK energy market; recognises that the impact of the UK Government’s proposals on welfare reform will increase the importance of Scottish Government action on fuel poverty; notes the recent comments of the Cabinet Secretary for Infrastructure, Investment and Cities at a meeting of the Parliament on 9 January 2013 that the Scottish Government remains committed to its statutory obligations to eradicate fuel poverty as far as reasonably practicable by 2016, and considers that the Scottish Government should bring forward an assessment of how it will fulfil this obligation, including milestones in a detailed published plan.”
15:02
With increasing domestic energy costs, fuel poverty is never far from the top of the political agenda—and rightly so.
It is invidious that households on modest incomes see such a high proportion of their available budget spent on heating their homes. Regrettably—some might say predictably—the Scottish Government’s motion, which seeks to address the issue, is a bit simplistic and predictable. A call on the UK Government to tackle the energy market demonstrates that there is no subject, however serious, on which the Scottish Government will not deploy its usual mantra of, “It’s all the fault of Westminster.” That must be particularly galling to hear for those who struggle to pay their bills, when every major wind farm development that the Scottish Government falls over itself to support means that greater levels of subsidies are paid for by the very consumers who face the choice of whether to heat or eat.
Will the member take an intervention?
Not at this stage.
The Scottish Government’s motion makes reference to the national retrofit programme. I whole-heartedly support the NRP but, in reality, I am concerned that it will not go far enough and, as ever, will be overly cautious in its approach.
The solution to reducing fuel poverty in Scotland lies not with jingoistic political slogans and ministerial foot stamping, but with a two-pronged approach that more fully utilises insulation systems and takes a fresh look at the area of microrenewables. Of course, attempts have been made over the years to make housing more energy self-sufficient, often with success, but those have invariably come at substantially higher costs.
Having looked closely at how the technology has been developed and utilised in many European countries, as well as places such as China and Japan, I am aware that the construction costs for homes that incorporate the comprehensive insulation and microrenewable technology that will free people from the burden of fuel poverty can now be comparable with the costs for their more traditional counterparts.
Will the member take an intervention now?
If Stewart Stevenson insists.
I am delighted to hear the member talk about renewables, but is he aware that between 80 and 90 per cent of recent rises in domestic energy bills are attributable to an increase in the price of oil, which, of course, means increased tax take for the Government? Would Mr Johnstone like that tax take, and all the tax from oil, to come here so that we can spend it on fuel poverty?
I will compensate you for taking that intervention, Mr Johnstone.
I hate to imagine what the tax take would need to be to finance the independent Scotland that the gentleman seems so keen to create.
I believe that the most positive and effective course of action now would be to look at the work that is being done in this field in the UK and abroad, and to fully embrace the technology that will deliver the kind of results for households and the environment that we all want to see. I urge the Scottish Government to take a bolder approach. I genuinely believe that even if we do not address the issue of fuel prices, using less fuel is a way to cut costs.
Looking at the responsibilities of Westminster, I see that the coalition Government is committed to tackling fuel poverty and supporting low-income and vulnerable consumers to heat their homes at an affordable cost.
Will the member take an intervention?
No, thank you.
In this Parliament, we regularly address the issue of fuel poverty, which falls within the ambit of the Scottish Government’s responsibilities, yet action is being taken at Westminster level that is extremely helpful. We have already heard the minister address some of those measures.
The green deal and the energy company obligation will be the flagship policies for improving the energy efficiency of the nation’s housing stock. ECO and the green deal that will run alongside it will have the twin objectives of helping to reduce carbon emissions and tackling fuel poverty. ECO requires energy suppliers to help households to access more expensive insulation measures such as solid wall and hard-to-treat cavity wall insulation through the green deal, and to provide measures that will help low-income and vulnerable households to reduce the costs of staying warm and healthy. Through ECO, around £540 million will be spent annually at a UK level, and we need to ensure that Scotland gets its fair share of that spending.
The community energy saving programme is targeted at the lowest 15 per cent of areas by income in Scotland and the lowest 10 per cent in England. The programme, which is designed to deliver comprehensive energy-efficiency retrofits on a street-by-street basis, is expected to deliver permanent fuel bill savings of up to £300 a year per household. By June 2012, 36 such schemes in Glasgow had been submitted to Ofgem for approval; unfortunately, I cannot provide an up-to-date figure. Under the super-priority group of the carbon emissions reduction target, some 600,000 low-income households across the UK will be helped. Again, we must ensure that Scotland benefits appropriately from that programme.
In addition, the Government will continue to provide pensioner households with the regular cold weather payments.
I turn to the position of the Scottish Government and its relationship with Westminster. If we are to achieve our objectives, it is vital that Scotland’s two Governments work together side by side, rather than competing with each other to achieve objectives that do not warm a single house. I am heartened by the fact that, this week, meetings will take place between the minister and representatives of the Westminster Government. I give her my full encouragement to take the opportunity to create some harmony, as well as some warmth for the people in Scotland who need it.
I move amendment S4M-05424.3, to leave out from first “recognises” to end and insert:
“expresses concern at the high levels of fuel poverty in Scotland, which, according to Energy Action Scotland, now affects 900,000 households; calls on the Scottish Government to provide greater clarity on its current budgetary commitment on fuel poverty and energy efficiency measures; commends the UK Government for the action that it is taking to reduce consumer bills though the UK Energy Bill and various energy efficiency measures, such as the Green Deal; urges the Scottish Government to fully detail its proposals for the National Retrofit Programme; condemns what it considers to be a paucity of ambition from the Scottish Government, which has seen it fail to fully engage with the micro-renewables sector; notes that Poland and other countries are now constructing social housing heated entirely by micro-renewables, and calls on the Scottish Government to review its energy policy, which, through its over-reliance on large-scale wind farms, is a major contributory factor in escalating domestic energy costs.”
15:09
I certainly welcome this latest debate on fuel poverty, although I regret the way in which the Government and the minister have chosen to frame it.
Just as there has been an enduring consensus across the political parties over successive Governments and sessions of Parliament on the commitment to eradicate fuel poverty, there has been a recognition that, if that is to be achieved, both Scotland’s Governments must play a full and collaborative part.
There may be disagreements about methods or the pace at which change happens, but that is natural on the basis of healthy debate. However, it is disingenuous for Margaret Burgess to try to characterise the situation as one in which the Scottish Government is doing everything that it can but is being thwarted by its counterpart in Westminster. Such a distortion of the facts carries with it a number of risks.
First, there is a danger that Scottish National Party ministers will start to believe their own spin, which will make it all the more difficult to persuade them that there are areas in which the Scottish Government needs to do more. The briefings from Energy Action Scotland, Citizens Advice Scotland, the Scottish Federation of Housing Associations and others make it clear that such areas exist, not least in terms of the resources that are being committed. That point was acknowledged by the Economy, Energy and Tourism Committee in its report on the Government’s budget, and I will return to it later.
The other danger, of course, is that such partisan misrepresentation does nothing to aid co-operation and collaboration between both Governments on this vital issue. It might be that, like many of her colleagues, Margaret Burgess is entirely relaxed about that prospect, but it illustrates the problem of having ministers who are so obsessed with the 2014 referendum and the powers that they do not have that, as Richard Baker suggested, they pass up the opportunities to use to full effect the ones that they do have.
Whatever the case, with Energy Action Scotland estimating that up to 40 per cent of households in Scotland might be living in fuel poverty, the challenge that faces all of us in meeting our shared objective of eradicating this scourge on our society is enormous and getting more urgent by the day. That is all the more reason to try to maintain the political consensus and joint commitment that has existed to date.
In that spirit, let me be clear that I accept that there are aspects of the UK Government policy that need more work. As my amendment suggests, I have no doubt that the green deal, the energy company obligation, the Energy Bill and so on all have the potential to deliver significant benefits, not just as part of a process of decarbonising our economy but specifically with regard to addressing fuel poverty. Nevertheless, I am also conscious that we need to learn lessons from the past and ensure that those initiatives offer opportunities to all our citizens and communities.
An example of that is ECO, which could see £100 million invested in Scotland this year and an estimated £120 million in future years. That investment is hugely welcome, but it is fair to say that, in rural and island areas such as the ones that I represent, there are questions about how effective that mechanism will be at channelling funds into those communities. That is a real concern.
As the minister knows, after the Western Isles, Orkney has the highest level of fuel poverty anywhere in the country. The reasons for that are obvious—the homes are harder to heat, the winters are longer and harsher, and we are off the gas grid. Yet, as Calor Gas points out,
“fuel poverty schemes often fail to address the fuel disadvantage of off-grid or rural homes.”
It is all the more essential, then, that programmes, whether they emanate from the UK Government or the Scottish Government or are taken forward by energy companies, are structured in ways that make them accessible to all. Those points were made to David Sigsworth, the chair of the minister’s advisory committee on fuel poverty, when he visited Orkney last summer. He saw at first hand some of the innovative work that is being done in Orkney in tailoring insulation and other energy-efficient solutions to meet the specific needs of islanders. He was also left in no doubt about the scale of the challenges that remain.
The member referred to the fact that Orkney is off the gas grid and to the hardship that faces struggling pensioners, in particular, with their sky-high fuel bills. Can he therefore explain why, last September, his Government in Westminster talked out the private member’s bill of Mike Weir MP, which would have dealt with the issue at least partially by allowing the payments of the winter fuel allowance to be brought forward to a point at which it is cheaper for the pensioners to buy fuel?
The reasons for that are not necessarily ones that I am privy to. Nevertheless, it was interesting that the member’s colleague, Stewart Stevenson, vaunted the soaring price of oil as the means by which the SNP would set up its oil fund, which would exist to buttress infrastructure development and, now, to pay for fuel poverty measures. The SNP’s panacea for fuel poverty is sky-high oil prices.
The member is misrepresenting me. Will he give way?
I would encourage—
Come on.
Order.
He named me.
Mr Stevenson. Order.
I encourage the minister to look again at supporting efforts in Orkney to harness more of the excellent renewable resources that we have in the islands to provide lower-cost electricity to fuel-poor households. At present, much of that resource is being constrained, off the grid, or pumped straight into the ground. Surely there is an opportunity for some joined-up thinking to allow Orkney and communities elsewhere in Scotland to derive more benefits from our assets. In the past, ministers have been reluctant to promote the idea of local councils or other community bodies taking on more of a role in energy supply, but that issue is worthy of further consideration.
I firmly believe that the Scottish Government has taken the issue of fuel poverty seriously. The development of many schemes that were initiated under the previous Scottish Executive has been sensible and effective, and I welcome the retrofit programme. However, the challenges in continuing to make progress are all too evident. In a sense, we have dealt with the low-hanging fruit, and what follows will be more tricky and costly. The Economy, Energy and Tourism Committee puts the bill at around £200 million a year; Energy Action Scotland insists that it is likely to be nearer £300 million. It has also made the point that the funding should be secure and over and above what the energy companies invest.
The minister will point to the £200 million in the budget, but that is almost certainly insufficient. She ignores the fact that the Government has made political choices about how it chooses to spend money. Since taking office, ministers have repeatedly refused to engage in discussions about how significant resources that are spent on Scottish Water might be better deployed while public control is retained over Scottish Water. That missed opportunity is directly affecting ministers’ ability to fund measures to combat fuel poverty.
The minister is correct to say that the number of households in fuel poverty at the start of the 21st century in Scotland, which is an energy-rich country, is scandalous. Tackling that will require collective effort, innovative approaches and significant resources. It does not need ministers relegating the issue below their obsession with the referendum and picking fights rather than working on solutions with Westminster.
I have pleasure in moving my somewhat lengthy amendment: I move amendment S4M-05424.1, to leave out from “the contrast” to end and insert:
“recognises the early indications from the National Retrofit Programme ‘go-early’ pilots that energy companies view Scotland as an attractive place to invest; further welcomes UK Government schemes to improve energy efficiency and tackle fuel poverty that will help households in Scotland, in particular the innovative Green Deal, which will launch in January 2013, under which individuals and businesses will be able to implement energy efficiency improvements to their properties paid for through savings on their energy bills, and the £1.3 billion Energy Company Obligation (ECO) that targets support at households in fuel poverty and those with hard-to-insulate homes; believes that as the ECO is taken forward, ministers should ensure that the obligation provides support for remote and rural communities with high rates of fuel poverty and higher costs; congratulates the UK coalition government on its decision to permanently increase the cold weather payment from £8.50 per week to £25 per week; recognises that action to reduce reliance on fossil fuels is required to tackle rising energy bills and welcomes the significant sums invested in the Scottish renewables industry in recent years, with around 11,000 jobs in Scotland now directly related to the renewables sector; further welcomes the UK Energy Bill, which is designed to ensure that there is a competitive market of diverse suppliers and energy sources in which consumers can obtain the best possible deal; supports the UK coalition government’s efforts to simplify tariffs to ensure that consumers are on the lowest tariff appropriate to their circumstances but, nevertheless, remains concerned that many customers find themselves subject to large increases in their energy bills, above the headline figure announced by energy companies; believes that, in order to meet the target to end fuel poverty by 2016, both governments must work together constructively in the best interests of Scotland’s people, and calls on the Scottish Government to work with the Treasury in order to unlock funds from Scottish Water to increase significantly its home insulation programme, which will reduce Scotland’s carbon footprint, cut family heating bills and generate thousands of green jobs across the country.”
We now move to the open debate. Speeches should be six minutes, please.
15:16
I fear that Liam McArthur somewhat wittingly misrepresented the position of my colleague Stewart Stevenson, who reasonably tried to make the point that, if Scotland had access to its own natural resources, we could utilise them for the benefit of the people of Scotland and invest the money in tackling fuel poverty rather than squandering it on an austerity agenda, as the UK Government is doing. Part of Mr McArthur’s solution is not only that we should not control Scotland’s oil but that we should not even control Scotland’s water. He needs to rise to the occasion rather better.
I welcome this debate. I use the word “welcome” advisedly, of course. I welcome the debate as the subject is an important one that we should be debating, but we would all rather not be having the debate. We are having it only because we have a problem with fuel poverty. It is a disgrace that Scotland, as an energy-rich country, has fuel poverty. I think that that was commented on earlier in a disparaging manner. We have debated the issue in the past.
Homes for Scotland has pointed out that one problem that is exacerbating fuel poverty is the significant increase in energy bills. It has made the point that,
“With energy bills having rocketed by 91% since 2006, fuel poverty now affects 684,000 Scottish households.”
The minister mentioned that figure. Indeed, Energy Action Scotland has said that, once more up-to-date figures are looked at, the figure could be higher than that. It is therefore clear that we have a problem.
How does that problem manifest itself? What does it lead to? As I said in a previous debate on fuel poverty,
“Professor Hills, who is director of the centre for analysis of social exclusion at the London School of Economics, has argued that fuel poverty poses serious public health and environmental problems. According to the Office for National Statistics, there are some 27,000 extra deaths in the UK each winter compared to other times of year. That figure is worse than the figures for Finland, Sweden and Norway, all of which have severe winters more regularly than these islands do.”
Professor Hills also pointed out
“that, in about half of cases in which a death was attributed to lower-than-average indoor temperatures, there were economic reasons.”—[Official Report, 26 October 2011; c 2758.]
Those reasons exacerbated the problem. It is therefore clear that the problem is a serious one.
I turn to the amendments. We have heard the call for increased funding, but we must recognise what the Scottish Government is doing. It is committed to investing some £200 million between 2012 and 2014 to deal with the issue. The Labour amendment says again, somewhat disparagingly, that some of the money might come from energy companies. Given that we live in an age in which the average dual fuel bill is a four-figure sum, it would be scandalous if those companies were not contributing to tackling the problem.
Will the member take an intervention?
I will gladly give way to Mr Baker.
I am not sure why SNP members are misinterpreting our position. We have said that the energy companies’ commitment should be welcomed and that it is important that the money should be secured. However, we want to know how far the Scottish Government has gone in the dialogue with the energy companies to ensure that the two thirds of the £200 million that they are to contribute has been secured.
My reference was to Mr Baker’s amendment, in which he almost blithely says:
“of the £200 million budget that the Scottish Government states that it has set for energy efficiency and tackling fuel poverty, almost two thirds is to come from energy companies”.
Frankly, what is the problem? I point out that that is in line with a recommendation of the Economy, Energy and Tourism Committee, which asked for a combined budget of at least £200 million between Government and energy company obligations. The Scottish Government has risen to that challenge.
I welcome the retrofit programme, as it is right to consolidate efforts and to attempt to improve existing homes, make them more energy efficient and reduce fuel poverty. I see that the existing homes alliance Scotland briefing for the debate states that it welcomes that approach.
Other briefings from housing sector organisations have offered suggestions to the Scottish Government. I do not necessarily support those suggestions, but they are at least worthy of exploration. Homes for Scotland suggests developing a retrofit reward solution, through which home builders would
“have the option of either complying with new Standards or continuing building to current 2010 Standards and making a financial contribution to a retrofit fund”.
That is an interesting suggestion that is worth exploring, although I am unclear as to whether it would be effective.
The Scottish Federation of Housing Associations calls for the utilisation of European money to fund improvements. Again, I am not entirely sure of the merits of that approach, but at least the federation is offering suggestions. I am sure that the Scottish Government will respond to it.
In the background is the UK Government’s approach to welfare reform. I am on the Welfare Reform Committee, which just yesterday heard evidence about how that reform will push a large number of people further into poverty. Against the trend of increased energy costs, welfare reform will make tackling fuel poverty ever more difficult. In the past, when progress has been made on tackling fuel poverty, price increases have served to wipe that out. If the UK Government suppresses people’s incomes through welfare reform, that will serve only to make it ever more difficult to tackle fuel poverty.
You might wish to draw to a close, please.
The background of the UK Government’s welfare reform agenda belies Alex Johnstone’s suggestion that the UK Government is working towards tackling fuel poverty.
I look forward to hearing the minister’s closing speech.
15:23
Earlier this week, energy bill revolution, a campaign of more than 100 businesses, charities and activists, issued an open letter to the Prime Minister to warn of the “national disgrace” that is fuel poverty. The campaign estimates that 6 million families are living in fuel poverty today and that, rather than coming down, the figure is actually going up and will reach 9 million by 2016. The campaign claims that Government schemes are simply not enough at a time of economic difficulty and rising energy prices. My concern is that many of the criticisms that the campaign has levelled at the UK Government are also relevant in Scotland.
The Scottish fuel poverty forum says that three main factors determine levels of fuel poverty: the energy efficiency of homes; energy prices; and household income. Too many people in Scotland today live in cold homes with their bills going up faster than their incomes. It is perhaps useful to reflect on how the combination of those factors can shape the experiences and daily lives of people who are already struggling.
In these troubled times, in which we are much more aware of climate change than ever before, we all ration our energy usage, but stories about pensioners on fixed incomes or families struggling to get by who are switching off—not because they want to keep their bills down, but because they have to do so—are challenging and troubling.
We should not tolerate an injustice that can leave people on low incomes in cold, damp houses, unable to pay their bills and afraid to use their heating and appliances. No citizen of our country should ever be forced to choose between heating and eating, especially during spells of cold weather such as the conditions that we are experiencing this week. There is consensus about the nature of fuel poverty but, as we have been hearing, there is still debate about how we prioritise solutions.
The Government’s motion refers to retrofitting of homes—a point supported by the existing homes alliance—so that we can raise energy-efficiency standards in existing homes as well as in new-build developments. In the budget debate yesterday, we heard the case for allocating, in full, the capital spending consequentials arising from the autumn statement towards housing. Boosting investment in housing would not only help to get the construction sector moving and bring down waiting lists; spending extra cash on retrofitting would make our existing housing stock more sustainable and would help to liberate some of Scotland’s many hard-pressed families from the injustice of fuel poverty.
The UK Government has to be challenged as well. The Prime Minister and the energy secretary have to show that they are serious about reform of the energy market. The disconnect and distrust between energy companies and their customers have never been greater. Without a radical overhaul of the energy market, the gulf will grow wider.
Some of my Labour colleagues in the UK Parliament have suggested that, if we are to restore confidence in energy markets, Ofgem should be replaced with a newer, tougher regulator—a watchdog with real teeth and the bite to match. Where it has been established that energy companies have abused their position in the market, the regulator should be able to do more than dish out a slap on the wrist. It should be able to force price cuts for bill payers and it should be prepared to shine a light on the practices of energy companies and act as a strong advocate for consumers.
Other solutions are being developed commercially, which could have a bearing on fuel poverty and energy consumption in years to come. I recently attended an open day and innovation fair at ID Systems in Central Scotland. It brought together companies from throughout the water industry, the oil and gas sector and manufacturing. I saw a demonstration for Umax, which is a liquid additive to central heating systems that changes the property of water to keep boilers from running too often and lowers fuel use. It was a simple demonstration but the lesson that I took from it is that, with some creativity and innovation, we can find new solutions as we grapple with complex problems.
Innovation and enterprise might not fall within the purview of the housing minister but she may wish to speak to some of her colleagues in other departments to ensure that the Government is following the good work of Scotland’s innovators and entrepreneurs, especially given the impetus to find products that make energy more affordable.
If household income is a key determinant of whether a family will experience fuel poverty, welfare cuts—which hit those in work as well as those who are out of work—almost certainly guarantee that levels of fuel poverty in Scotland will rise. In that context, the role of the Scottish Government becomes all the more important in ensuring that welfare rights advice and the energy assistance package are well used and properly promoted to those most in need.
Fuel poverty has been with us in Scotland for too long, and I fear that it will be with us for some time to come. Both of Scotland’s Parliaments share a genuine concern about fuel poverty, but my appeal to Government today is that it should recognise its shared responsibility for finding a sustainable way forward.
I welcome to the gallery the High Commissioner of the Republic of Malawi, His Excellency Bernard H Sande. [Applause.]
Our next speaker is Annabelle Ewing. You have six minutes.
15:29
I thank all of the many organisations that have been in touch with us, providing their views on the important issues that we are discussing today and supplying us with figures that should leave no one in any doubt that fuel poverty is a real and present danger in our society today.
In the latest published figures on fuel poverty, some 29 per cent of households were found to be fuel poor. As we have heard this afternoon, projections have been made by Energy Action Scotland, for example, that, taking into account fuel price rises since 2011, the total may be closer to some 900,000 households. That means that about 40 per cent of households in Scotland are in fuel poverty.
We have been given a pretty clear picture of how bad the situation is, and I hope and believe that there is no member of this Parliament who does not recognise that. Certainly, on the SNP benches there are no illusions whatsoever as to the scale of the problem, but of course the job at hand is to ensure that the right decisions are taken to tackle the problem, to reverse the trend that we see and to meet the targets that have been set for ending fuel poverty.
The minister clearly laid out in her opening remarks what the Scottish Government has done and is continuing to do for households in fuel poverty. The minister also highlighted how much worse the situation would be were it not for the Scottish Government’s firm commitment to tackling fuel poverty, given the impact of so many factors over which the Scottish Government and the Parliament sadly have no power, and the inaction of the Westminster Government, which does have the power.
It might be instructive in that vein to look at what the other parties in the chamber have to offer us. It is interesting to compare and contrast the Tory and Lib Dem amendments, particularly the attitudes on renewables—although I see that our Lib Dem colleague is temporarily outwith the chamber. While the Tories attack the Scottish Government for what they call an
“over-reliance on large-scale wind farms”,
which the Tories then go on to assert is a
“major contributory factor in escalating domestic energy costs”,
the Lib Dem amendment
“recognises that action to reduce reliance on fossil fuels is required to tackle rising energy bills and welcomes the significant sums invested in the Scottish renewables industry in recent years, with around 11,000 jobs in Scotland now directly related to the renewables sector”.
Does the member not also think that it is somewhat ironic that the Tories, in slamming wind farms, failed to mention that two of their members are trying to sell land on which wind farms can be built?
There are many things about the Tories and their policies that raise intrinsic issues and contradictions.
When we talk about the Tories and the Lib Dems pulling in opposite directions, it perhaps explains why the UK economy is in such a mess, given the different perspectives of the UK Tory-Liberal coalition Government partners.
The Tories are calling on the Scottish Government to review its energy policy. I call on them to take a look at the Scotland Act 1998, schedule 5, head D on energy. What do we see? We see that it is a reserved power to the Westminster Government and that Scotland’s hands are tied.
The Lib Dem amendment, despite the promising passage that I quoted earlier, spends most of its time calling on the Scottish Government to play cheerleader to a Westminster Government that is not even supported by the people of Scotland. The Lib Dems talk of protecting consumers and ensuring competition in the energy marketplace. Again, we should look at the Scotland Act 1998, schedule 5, heads C3 on competition and C7 on consumer protection. Again, those are reserved powers and Scotland’s hands are tied.
I am grateful to the member for giving way. On the point about constitutional power over energy policy, does she not accept that the banding for renewable energy is in fact a devolved matter, as indeed is the whole question of planning for development? There is a whole range of powers within the gift of the Scottish Government that it could use if it wished to.
I do not know whether the Tories are trying to suggest that energy policy is not set in concrete terms by the UK Government at the present time. If Murdo Fraser is trying to suggest that, he is certainly rewriting history as we speak.
I now turn to the Labour Party’s amendment. It
“recognises the role that the energy industry has in addressing fuel poverty”
and it goes on to recognise the need for
“reform of the regulation of the UK energy market”.
As a member of the Welfare Reform Committee, I am particularly pleased to note that it has chosen to highlight
“the impact of the UK Government’s proposals on welfare reform”
but, once again, we are back to the Scotland Act 1998, schedule 5. This time it is head F on social security. What do we see? We see that it, too, is a reserved power and that Scotland’s hands are tied.
The broader context of the debate is all about the scandal of fuel poverty in the midst of energy plenty. It is about the disgrace of so many being left to freeze in a country that has around 25 per cent of Europe’s potential offshore wind and tidal energy, a 10th of Europe’s wave power potential and something in the region of 24 billion barrels of oil still sitting under the North Sea.
We live in what should be the sixth richest country by Organisation for Economic Co-operation and Development rankings and still we have citizens who cannot afford to heat their homes properly. The members from the Labour, Lib Dem and Conservative parties—the anti-independence parties—sneer at what this Government is doing within the limited powers and constrained budget that it has. They fret at the possibility of this Parliament’s practical impotence in the face of a problem of such scale but, at the same time, outside these walls they stand shoulder to shoulder with one another to defend the constitutional arrangements that allow the situation to happen.
I welcome all that the Scottish Government is managing to do at present, but I say roll on 2014, when I am confident that we will win the powers of a normal nation and make Scotland a powerhouse—a nation blazing a trail for renewable energies, building a fairer and more equal society, and banishing fuel poverty for good.
15:35
I join members in welcoming the fuel poverty debate.
Fuel poverty continues to burden far too many households in my region and throughout Scotland. As we have heard, the Scottish Government has made a crystal-clear pledge to abolish it by 2016. Although I am sure that that ambition is shared across the chamber, it appears that progress is not sufficient to make it reality. In fact, the most recent figures show that fuel poverty is not being ended but is increasing. More and more people are struggling to pay their energy bills.
We have heard a number of statistics this afternoon. It is extremely worrying that Energy Action Scotland estimates that around 900,000 households—nearly a million—are affected by fuel poverty. That is not progress. More must be done, as the severity of the situation is clear.
It is widely accepted that there are three main factors in creating fuel poverty: energy prices, household income and energy efficiency in homes. Many speakers have rightly pointed to energy prices as a significant contributing factor to increasing fuel poverty. Energy prices, which are already unacceptably high, continue to rise while incomes stall. Vulnerable customers who are in need of protection continue to be ripped off while energy companies record huge profits.
In November last year, Scottish Gas announced a 6 per cent increase in energy prices. At the same time, its parent company, Centrica, posted profits of £1.4 billion. Scottish Gas is not the only culprit: all the major energy providers announced price rises this winter for UK customers, with the big six announcing rises ranging from 6 per cent to 11 per cent over the past few months. Citizens Advice Scotland backs that up in a survey that has already been mentioned. It shows that energy bills have doubled in the past eight years and are set to increase further.
I recently spoke to a constituent in Paisley who was told that, because of his postcode, he would have to pay £150 to have a pre-paid meter removed from his house. How will people who are already struggling to pay their energy bills be able to get out of the poverty trap if the costs and the postcode discrimination are not addressed?
Energy giants should not be able to get away with inflation-busting price rises when they are already making massive profits. There is no doubt that the energy market is in need of overhaul. I want vulnerable customers to be protected and savings to be passed on to consumers.
I agree with my Labour colleagues at Westminster that we need to consider setting up a new, strengthened energy regulator. However, we also need to consider new and innovative ways of helping people with their bills.
The Labour Party is taking positive steps by launching a switch together campaign to drive down energy costs through signing up thousands of people to switch suppliers collectively and force better deals. That is a practical suggestion that I hope local authorities, housing associations and the Scottish Government will consider and support.
There is no doubting the impact of hikes in energy prices on households throughout Scotland. However, the Scottish Government can do more to help the families who are forced to choose between heating and eating.
Two years ago, the Government cut spending on fuel poverty, and families are feeling the impact of that today. The Government has at its disposal powers and resources that it must start using. It has powers and resources to improve the energy efficiency of our homes. For example, yesterday, in the budget debate, we argued that additional investment in housing could not only increase the number of warm and energy-efficient homes but provide an expanded retrofit programme to improve the energy efficiency of existing houses. That, in turn, could create jobs and apprenticeship opportunities, which are even more important because we know that household income is a key part of fuel poverty.
Figures from the Department of Energy and Climate Change show that the proportion of households that are in fuel poverty is considerably higher in Scotland than in England. The Scottish Government needs to tell us exactly how it will address that.
I know that the Government has a desire to secure £200 million to invest in tackling fuel poverty, but there are a number of questions—not just from me but from organisations such as Energy Action Scotland—that need to be answered about that. I understand that almost two thirds of the required £200 million is to come from the fuel companies, as has been mentioned. I ask again how much of that has been delivered. Can we have an assurance that the money will be passed on to customers through savings on their bills?
We need to support community groups that are working on fuel poverty. With my colleague Mary Fee MSP and Jim Sheridan MP, I took the opportunity last weekend to visit the local energy action plan—LEAP—project in Bridge of Weir in Renfrewshire.
LEAP provides free local services to communities in Renfrewshire. It helps residents to save energy and money by providing free and impartial advice on insulation, draught proofing, heating, grants and subsidies. It was great to meet some of the dedicated volunteers and see the positive work that they are doing to reduce people’s utility bills. Such initiatives make a difference to communities and I would like the Scottish Government to support the roll-out of more such projects urgently across Scotland, so that households in my region and across Scotland can benefit from those excellent services.
Vulnerable and low-income families cannot wait years to get help to alleviate the misery of fuel poverty. Instead of seeing significant progress, we are seeing an increase in the number of households that are in fuel poverty. The Scottish Government pledged to abolish fuel poverty by 2016. There is no doubt that rising energy prices make that target more challenging, but ministers can and must do more. That is the least that families and households deserve.
15:41
I congratulate the minister on the motion. I believe that the Scottish Government is attempting to develop a holistic approach to tackling fuel poverty.
I welcome the opportunity to have the debate, although fuel poverty and its consequences should have been consigned to the dustbin of history. Poverty and fuel poverty have been around for a long time, and the complexities of this aspect of poverty are, shamefully, still embedded in all too many of our communities.
Since the mid-1980s, progress to tackle poverty has relied on few mechanisms. The hope has usually been that economic growth would trickle down to the poorest in society or that the increasing dynamic of welfare-to-work programmes would by itself solve working-age poverty, without any meaningful change in the incomes of those who remained out of work.
It needs to be recognised that household budgets have been and are under severe strain. From 2006 to 2011, electricity bills increased by 54.9 per cent and gas prices increased by 80 per cent. That has resulted in many people having to make tough decisions about how they spend their money in these most difficult times.
Fuel poverty is an important issue—even more so when we consider that the aim was to eradicate it by 2016. When that target was set, nobody expected rising prices and falling earnings, which have drawn more households into fuel poverty.
In relation to fuel poverty, one strength of policy in the recent past has been the acknowledgement that poverty is multifaceted. The emphasis on social exclusion is welcome, but that agenda was nothing new to some of us—especially those who have worked on the issues for a number of decades.
It is worth observing that utility companies are distrusted more than banks in the minds of consumers such as small businesses. An ingenious Britain survey said that just 28 per cent of firms trust their energy supplier, whereas a third trust banks.
The Which? report “The Imbalance of Power” revealed that consumers face an increase of as much as 17 per cent in electricity prices. Only one in 10 could spot the cheapest deal, which highlighted how confusing the market is. When the Consumers Association showed people simplified energy tariffs in the style of petrol forecourt displays and asked them which was the cheapest, the number who could spot the answer shot up to nine out of 10. It is clear that something must change.
Given the diverse nature of fuel poverty, the policy mix needs to be flexible in its approach to tackling it. As a society, we have to understand and tackle the problems of fuel poverty. We must take every step that is possible within the powers of the Scottish Government and the Scottish Parliament to eradicate this blight in Scotland, and we must urge the UK Government to raise its game in dealing with some of the root causes of poverty.
I welcome the motion that we are debating today and indeed the long-standing commitment to the principle of poverty proofing policy. Although the initiatives to retrofit and improve insulation standards in homes have to be welcomed, we also have to ensure that fuel prices do not continue to outstrip the financial benefits to households of mitigation measures that are put in place to alleviate fuel poverty.
I have no doubt that fuel poverty will continue to be a major concern to all in the Parliament. I look forward to the minister providing regular updates on how the programme to tackle fuel poverty over the coming period, particularly up to 2016, will benefit the people of Scotland. We should all be concerned when, in this day and age and particularly at this time of year, many people, and particularly pensioners, face the real hazard of having to decide whether to heat their homes or to feed themselves. As other members have said, the situation that we face is one that we should not be facing in the 21st century. The more measures that we can put in place to eradicate fuel poverty, the better. We must give families in Scotland security and ensure that they do not have to live in the desperate situation of having to decide whether to heat their homes, feed themselves or clothe their children.
Clearly, the issue should concern everyone in the Parliament and outside it. I look forward to the continuing work by all the agencies and organisations, and work both inside the Parliament and outside it. We must work together to ensure that we can truly eradicate fuel poverty in Scotland and also move towards eradicating poverty.
We have a small amount of time in hand, so if members modestly wish to take a little longer, that would be welcome.
15:47
I welcome this debate on what is an important and challenging issue, and I am pleased to speak in it. This is a debate that affects every household in Scotland and it is only right that, as parliamentarians, we challenge the issues surrounding it. Most colleagues will be aware of the challenges that their constituents face with rising fuel costs and increasing prices across all walks of daily life. I know only too well, through surgeries and through letters, emails and phone calls that I have received at my office, the desperate situations in which many of my constituents have found themselves. I am sure that I speak for most members in that regard.
As we all know, winter is when most people use the greatest amount of fuel to heat their homes. With rising prices and the threat of cuts hanging over many people’s heads, decisions have to be made when it comes to how people look after their families. Too often in the Parliament and beyond it, the example is given of old-age pensioners sitting in their homes having to decide whether to put the fire on to warm themselves against the freezing conditions of winter or to buy food to avoid starvation. John Wilson highlighted that situation. I know that it sounds like an exaggeration, but it is a fact that older people sometimes starve themselves to death.
That is an everyday choice for many people. It is a choice about the best way in which to least damage their health. That situation continues to be played out across our country, in homes and kitchens, among both families and single occupants. In a modern, developed, energy-rich country such as Scotland, it is a disgrace that that story is becoming even more commonplace rather than being a rarity.
Despite the confines of the current devolved settlement, I applaud the Scottish Government for the measures that it has adopted in an attempt to counter the worst effects of the current situation with the limited powers that are available to it. Of course, its efforts are undermined not only by the fact that it does not have all the powers that it needs but by the detrimental impact of the Westminster Government’s kamikaze approach to welfare reform, which will only put more households into fuel poverty.
Figures released by the Scottish Government in December 2012 showed that, in 2011, 684,000 households—or 28.9 per cent of our people—were classed as fuel poor. Energy Action Scotland estimates that, over the course of 2012, that figure will increase to more than 900,000 households or 40 per cent because of fuel prices and other financial pressures on household budgets. Those staggering figures will put more pressure on the national health service, local government services and the whole economy. Given that the whole of society will be affected by the rising number of people living in fuel poverty, we have an obligation to do as much as we can to alleviate the problem.
In addition to the rise in fuel costs, there is another burden on people who live in houses with poor energy efficiency. After all, it does not matter how much heating a house might have; if it has poor insulation or an outdated boiler, most of the warmth will be lost. That is why I am pleased that the Scottish Government is working with energy companies to identify £200 million a year for the development of the national retrofit programme, as outlined in the draft budget.
However, that is not enough. More pressure must be put on energy companies to provide a better deal for consumers. The quest for profits at the expense of pushing people into fuel poverty is nothing short of a disgrace and I join the Scottish Government’s call for the UK Government to intervene and ensure that the market provides better for people.
We on this side believe that independence and the choices that it will bring can make the difference on these matters, and it will be a strong part of the offer that we intend to make to the Scottish people in the referendum. Given that this is all happening under the union, the challenge for unionists—indeed, their duty—is to explain how they intend to change these matters and end the misery. In my view, we will be able to truly tackle this kind of poverty only when the Scottish Government has full powers over our natural resources.
Given my age, I was disturbed to hear the member from the northern isles talking about the worst aspects of fuel poverty and saying that, as far as he was concerned, the impacts were felt worst in his area. I thought about the oil that sloshes about the northern isles and was reminded of the potato famine and the fact that food was being sent away from Ireland while tens of thousands of people—indeed, a million of them—were starving to death. Despite having all this energy, we have this member telling us exactly what is happening on his patch. I find it disgraceful that that sort of rhetoric is being heard in this chamber; we need to change these things and the responsibility to do so is on all of us, unionist or otherwise. We live in a very rich country and it is time that we took action to change this situation. Mr McArthur should not be coming to the chamber and explaining these things to us; he should be explaining them to his constituents. It is just not good enough.
At which point, Mr Paterson, I suggest that you draw to a close.
Thank you, Presiding Officer.
I appreciate that.
15:54
The current economic reality of low wages and high unemployment has led to some of the most difficult years in living memory for thousands of Scottish families. That, coupled with the rising costs of energy, has resulted in an increase in Scots suffering fuel poverty, as we heard. Every day, people are forced to make a choice between putting food on the table and heating their homes.
We live in one of the richest nations and it should be unthinkable that so many of our constituents struggle to keep their families warm during the cold winter months, yet 684,000 Scottish people are currently suffering fuel poverty and allotting more than 10 per cent of their household income to meeting the inflated demands of the big six energy firms that operate in the UK.
The Scottish average for the proportion of income that is spent on energy has reached 14 per cent, which is tragic when we consider that the Scottish Government pledged to eradicate fuel poverty by 2016. I accept that rapidly increasing energy costs have had a significant impact on the achievability of the target. However, the Government has yet to show how it intends to abolish fuel poverty, given that fuel poverty rose last year and the situation shows no sign of improving in the immediate future.
The Government’s decision to slash a budget that was specifically intended to address fuel poverty in Scotland has meant that thousands of the most vulnerable people in our communities are unable to heat their homes throughout winter. The Government chose to reduce the financial allocation for fuel poverty initiatives by more than £14 million last year. That had a direct impact on, for example, citizens advice bureaux, which have been inundated with requests for assistance with rising energy costs, mostly from young single women who live in rented housing.
The Government needs to deliver on the promises that it makes to the people of Scotland. It should come clean on why it chose to diminish the support that is offered to individuals who, tragically, are all too often forced to make a choice between heating and eating. The resources that are provided to the vulnerable people in our communities who suffer fuel poverty should come in a variety of forms, including advice on how to save money on their energy bills throughout the year.
A few months ago, I arranged an event to bring together a number of energy advice services and communities in Glasgow. The event was arranged with the Glasgow home energy advice team—G-HEAT—which was established to provide independent advice on energy-related issues to home owners and tenants, with the aim of reducing consumption and costs.
Such positive action is necessary in the campaign against fuel poverty and empowers people to take action against the multinational energy companies that have exploited our communities for too long. However, such an approach will be effective only with continuing and genuine support from the Government, which has yet to explain its decision to cut the fund that was intended to tackle the growing and serious issue of fuel poverty.
I hope that we can achieve the target to eradicate fuel poverty by 2016, but it is increasingly clear that the action that is required if we are to do so has not yet been taken. That means that hundreds of thousands of Scots continue to suffer from the disgraceful and exploitative business practices of the big six energy firms in the UK.
15:58
I apologise to members, because I will leave after my speech. I will read subsequent speeches in the Official Report with interest.
I welcome this important debate, which is timely as the chill hand of winter clasps us to its icy bosom for the first time this year and the reality of heating costs is hitting many homes very hard.
I listened with interest to a number of things that Liam McArthur had to say. He criticised us for suggesting that we were being thwarted by Westminster. I want to expand a little bit on his intervention on my colleague Annabelle Ewing in relation to Mike Weir’s proposed bill, which would in fact have cost nothing, as it would merely have advanced payments within the financial year. However, his bill was not given the slightest serious consideration at Westminster and was simply talked out.
For those who heat their homes by gas or electricity and have the energy conveniently delivered automatically by the national grid, the need to pre-plan and pre-pay for their energy use is largely absent. However, many of my constituents and many of those of other members are based in a rural location and are dependent on fuel that they have to order and have delivered—fuel that they have to pay for before use. They would have found advance payment of the benefit a modest but much-valued piece of support that Westminster could have provided at zero cost. It would have involved not new expenditure but simply retiming.
Domestic oil is the main rural energy source, and it cannot readily be bought in dribs and drabs.
I certainly do not disagree with anything that Stewart Stevenson has said. However, does he welcome the move to put in place permanently an increase from £8.50 to £25 for the winter fuel payment, rather than wait for the payment to be triggered by a drop in temperatures or, indeed, a calculation of the wind-chill factor?
Of course I do. However, given that it generally takes a four-figure sum to top up an oil fuel tank and that there is a delay of four weeks during the cycle of rising prices that we always see as winter approaches, the increase that the member referred to would not match the increase in price that is created when people are unable to buy early, when the prices are low.
That is why it is such a disgrace that Westminster did not even consider the substantive issues in Mike Weir’s bill. It would have been fair enough if Westminster had analysed it and found it impractical. I would have been disappointed by that, but the process would have been just and fair. However, talking out bills on matters that are important to people in rural Cornwall, rural Wales and many parts of Scotland is simply an abrogation of democratic accountability and responsibility.
Of course, for my constituents, insult is added to injury when they see the flares of the St Fergus gas terminal, from where on many days the majority of the UK’s gas comes to the beach. Few of my rural constituents have access to that gas through the mains.
Before there is a vote on our having the full powers of a normal nation in 2014, what should we focus on? I very much welcome the substantial sum of £250 million that has been allocated to fuel poverty and energy efficiency by the Government in the current spending period. I will focus on fuel efficiency and energy efficiency in particular—partly because of the policy reach that is associated with the area, because in addressing fuel poverty, we also address employment and climate change. In relation to climate change, consuming less energy is closely associated with emitting less in the way of dangerous greenhouse gases. Substantial progress towards greening our energy consumption in buildings is welcome, and we must keep up the pressure on that. However, most energy still has a substantial fossil fuel element, so the message “burn less, emit less” continues to be relevant.
Energy efficiency almost always starts with simple, modestly priced adaptations of existing buildings. Home insulation is one adaptation that is particularly effective in reducing energy consumption. This is the first winter that we have had 600mm of insulation in the loft at our house—up from 200mm last winter. We have already seen a 40 per cent reduction in the consumption of oil that we burn in our boiler. Such reductions will be replicated by other people. That is kind to the climate and brilliant for the wallet. Insulation interventions also create jobs that are largely local, which keeps money in our own economy and boosts employment that is generally accessible to a wide range of unemployed people. It is therefore a win-win-win agenda.
We have heard a number of speeches in this debate, on which I will make brief comment, if I am permitted to do so.
You are in your last minute.
Murdo Fraser said that we have planning control over energy. We certainly have administrative devolution, in sections 36 and 37 of the Electricity Act 1989, but we have no legislative competence to go with that.
One of the things that I was most pleased about as a minister was an early action to get Lynne Sullivan to chair a report into our buildings and how we could make them carbon efficient. We continue to inherit the benefits of having taken that action.
Please draw to a close.
Like Richard Baker, I am looking forward to the Energy Action Scotland Burns supper. I am certainly preparing my contribution—I do not know whether Richard Baker is speaking as well.
We have more consensus than the plethora of amendments might immediately suggest. I hope that we can unite around the Government’s objectives, which I believe offer a sensible, practical, affordable and ultimately effective way forward for those in fuel poverty.
16:06
Like Stewart Stevenson, I start with an apology, as I was absent from the chamber earlier. When you pointed out that the High Commissioner for Malawi was in the gallery, Presiding Officer, I recalled that I had missed a meeting with him at lunch time, so I took the opportunity to nip out to meet him.
I agree with Stewart Stevenson: despite some of the language around the debate, I detect that the consensus that I referred to in my opening speech remains and that there are areas on which the Parliament can collectively move forward.
However, as I said at the very start of my speech, I have concerns about the way in which the Government has approached the debate, which I think set the tone for many SNP members’ speeches. I make an exception for John Wilson: although his remarks were as passionate as those of any of his colleagues, they were more balanced.
It is entirely appropriate for SNP members—indeed, for any member—to raise questions and concerns about what the UK Government is or is not doing to combat fuel poverty. UK ministers have a key role in making important judgments about how legislation, spending and overall policy are framed, and their decisions must be informed by the perspective that we can bring in representing a wide range of communities across Scotland and other key stakeholders. Interestingly, Fergus Ewing goes to great lengths to insist that the overall UK energy market would not change greatly with separation—although he is playing to a different audience.
However, the claim in Margaret Burgess’s motion—that the UK Government’s support for fuel poverty measures is retreating—is nonsense. Winter fuel payments are being increased permanently from £8.50 to £25, and I am sure that that will be welcomed by Annabel Goldie—sorry; I mean Annabelle Ewing. I made the same mistake that Alison Johnstone made last week—I do apologise. I am also sure that that increase will be welcomed by Annabelle Ewing’s colleague, Mike Weir.
The ECO-funded affordable warmth scheme will operate UK-wide—unlike its predecessor, which applied south of the border only, it will include Scotland. The scheme will deliver up to £350 million per year.
The welfare reforms are taking place against that backdrop. Changes to tax credits will leave some 100,000 households in Scotland worse off by £700 a year on average, and the bedroom tax will leave 100,000 households worse off by £600 a year on average—that is even before we consider the changes to child benefit. Can Liam McArthur honestly say that those families will find it easier to meet the cost of their fuel bills?
It is interesting that Jamie Hepburn’s intervention reveals absolutely nothing about the SNP’s approach to welfare reform. I perfectly understand that difficult decisions will be made that will impact on households across country. Nevertheless, there is no information from the SNP about how it would simplify the reform package and deliver it in a way that would not impact on households. There is a risk that SNP ministers will send out such a jaundiced view of other initiatives that people in Scotland are discouraged from applying to schemes such as the ECO scheme and the green deal that could benefit them. Certainly, Scottish ministers regularly use a similar argument when they are faced with questions about their own schemes and programmes.
The minister must accept that it is right for Opposition members, and in fact their duty—not to mention that of her own back benchers—to highlight where they believe that the Scottish Government needs to up its game. That is not sneering or scaremongering, nor is it hypocrisy on the part of Opposition members. If anything, we are taking the First Minister at his word when he said that he did not have “a monopoly on wisdom”, even if the notion that his would be a majority Government with a minority ego stretched credibility rather too far.
I am not saying that Scottish ministers have been sitting on their hands. I do not believe for a second that Margaret Burgess takes the issue of fuel poverty anything other than extremely seriously, but she must recognise that there are areas where the Government can do more. I touched on a couple of examples of that in my earlier speech, although I was drowned out by the howls of outrage on the SNP benches at my suggestion that part of the SNP’s solution to fuel poverty is sky-high oil prices in an independent Scotland.
An example that I mentioned earlier is that of establishing how local communities can harness their renewable energy resources to provide lower-cost electricity to those in fuel poverty. Examples of such schemes already exist in Orkney, and I see no reason why communities in other parts of the country should not be helped to do likewise. Another example that I touched on earlier relates to the overall level of funding to support action to tackle fuel poverty. Energy Action Scotland estimates that the funding needs to be increased by around £300 million a year. That will require ministers to be more open to the ways in which funding can be found—in that regard, I offered the example of Scottish Water.
However, I did not give sufficient attention earlier to the work being done on fuel poverty by Citizens Advice Scotland. Its recent energy report demonstrates just how active citizens advice bureau advisers have been in providing invaluable support to some of the most vulnerable people in our communities. It is estimated that CAB advisers dealt with almost 7,500 people, and their advice helped to secure well over £200,000 of financial gain for clients by ensuring that people claimed support under the warm homes discount, received the best available tariff or accessed free insulation and discounted central heating. Such advice is exceptionally valuable and demonstrates the fact that more can be done to get maximum value from existing initiatives, whether those have been put in place by the UK Government, the Scottish Government or local authorities, or, indeed, are run by the energy companies themselves.
Of course, much more needs to be done, as members across the chamber have accepted. There is an issue of particular note in relation to tariffs and charges. I welcome moves to simplify the bewildering array of tariffs, which often offers customers a very false sense of choice. I can also see merit in requiring energy companies to put their customers on the best available tariff, although that will need to take account of the way in which people use energy, as the superficially cheapest tariff may not always best meet a person’s needs.
As Margaret McCulloch, Anne McTaggart, John Wilson and many others observed, energy companies have some way to go to rebuild trust among their customers. Many reasons for that have been cited, as members outlined. For my own part, over recent months I have been struck by the number of complaints from constituents in Orkney who have expressed real anger that their fuel bills have risen considerably higher than the headline rise that the energy companies announced last autumn. That does nothing for consumer confidence in how energy companies operate; it does even less for our efforts to combat fuel poverty.
The minister mentioned that she is due to meet Ed Davey and Michael Moore in the near future—
You should be drawing to a close, please.
I certainly encourage the minister to take up that issue with her UK counterparts. I have also taken it up with Ofgem.
Jamie Hepburn was right that it is highly regrettable that we need to have this debate. I agree with all members who have said that the levels of fuel poverty are scandalous. However, tackling them will require a collaborative effort north and south of the border, innovative solutions and significantly more resources.
16:13
It is clear from the debate that we have a substantial and rising problem with fuel poverty across Scotland. In December, the Scottish Government released the latest fuel poverty figures, which are from 2011. At that stage, the number of fuel-poor households was 684,000—nearly 29 per cent of the total. However, as we heard during the debate, Energy Action Scotland estimates that the current figure is closer to 900,000, which would be 40 per cent of the total. The problem is huge, and it is growing. We should not forget that the Scottish Government has a target to eliminate fuel poverty in its entirety, in so far as is reasonably practicable, by November 2016, which is less than four years away. One does not need to be Einstein to work out that, in the current circumstances, that is a very ambitious target.
There are principally two reasons for the increase in fuel poverty. The first is that household incomes are, generally, not increasing; if anything, they are static or in decline due to the economic backdrop. The second reason is that fuel prices and costs have been increasing dramatically.
I will ask Murdo Fraser essentially the same question that I put to Liam McArthur.
Murdo Fraser rightly points out that household incomes have had a tough time over the past few years, but changes are being made through welfare reform and a number of households in Scotland will be affected by changes to tax credits and the introduction of the bedroom tax. Does he accept that those changes will make it harder for people to pay their fuel bills? I would appreciate a yes or no answer, unlike the response provided by Liam McArthur.
Whatever—[Interruption.]
Can we have a microphone for Mr Fraser, please?
I hope that Jamie Hepburn will join me in welcoming the action that the coalition Government is taking to increase the tax breaks for the least well-off in society, who will pay less tax on their income. Of course, as Liam McArthur fairly said, we have heard no alternative to welfare reform from SNP members, and they have proposed no ideas about where the money would come from if savings are not made. Would they borrow more money or would they cut spending elsewhere? We simply do not know.
There has been a rich irony in the debate, with SNP members on the one hand having to rely on high oil prices to fill the fiscal black hole that would exist in an independent Scotland and on the other realising that high oil prices cause fuel poverty. They cannot have it both ways, and they should stop passing the blame on to Westminster.
We cannot have this debate without looking at the cost of energy and the sources of energy. I commend to the chamber the excellent work of the economist Professor Gordon Hughes from the University of Edinburgh, who has looked at the relative costs and different means of producing electricity. It is clear from that work that intermittent wind power carries a high cost—a cost that has to be borne by the consumer.
The Scottish Government’s obsession with wind-based energy policy is not only blanketing our countryside with wind turbines, but contributing to fuel poverty. Every electricity bill includes a rapidly increasing levy to pay for the subsidies for wind turbines. Every time we hear someone evangelising on behalf of the wind power industry—we hear that all the time from those on the SNP benches—let us remember that that industry is built on increasing fuel poverty. Every time we hear wind farm developers talking about the sums that they pay out in community benefit, let us remember that every penny of that community benefit is being robbed from the public, many of whom can barely afford to heat their own homes.
The UK Committee on Climate Change looked at the impact on bills in the long term based on different technologies. According to a recent report, electricity costs could go up 68 per cent by 2050 if we rely on gas, and by 210 per cent if we rely on renewables. It goes without saying that there is, of course, an unpredictability to fossil fuel costs, but the United States has seen a substantial fall in the cost of gas, with wholesale prices falling by more than 50 per cent as a result of the exploitation of shale gas and consequent reductions in household bills. Moreover, in the States there has been a reduction in CO2 emissions because of the displacement of coal as a means of producing electricity. There is a cost to the SNP Government’s fixation with wind power policy.
What else can be done to tackle the problem? The UK Government is to be commended for the approach that it has set out in the Energy Bill, which would require energy companies to help customers get on the best energy tariff and to promote energy efficiency through electricity demand reduction. We know that there are far too many different tariffs available and that the picture is far too confused. John Wilson delivered a very good speech in which he highlighted that particular problem. The issue needs to be simplified, and the UK Government’s action on that front is welcome. Like Liam McArthur, I welcome that as a major step forward.
The Scottish Government has responsibilities in that area, too. During its evidence-taking sessions on the Scottish Government’s draft budget, the Economy, Energy and Tourism Committee heard that £200 million each year is required to meet the 2016 target. As we have heard, the Scottish Government has allocated £65 million—one third of the required sum—and expects the rest to come from the energy companies. It is unclear to what extent the various measures that the Scottish Government is proposing are being targeted on the fuel poor as opposed to those who simply wish to reduce their fuel bills and improve energy efficiency.
The Cabinet Secretary for Finance, Employment and Sustainable Growth ducked the issue in his response to the Economy, Energy and Tourism Committee’s budget report, so we need greater clarity from the Scottish Government about what exactly is on offer.
Much more needs to be done to promote energy efficiency. That is covered in the UK Energy Bill. The cheapest energy of all is that which is not used. A wide range of programmes are currently available to consumers, but the landscape is confused and much more needs to be done to simplify it.
In addition, there is the green council tax discount, which the Scottish Conservatives were instrumental in having introduced, but its take-up rate is woefully low and there is very little public awareness of the scheme. Much more needs to be done to encourage local authorities to make use of it, and to incentivise householders to improve the energy efficiency of their homes.
It is simply not good enough for the Scottish Government to give Westminster all the blame for the lack of progress. Through the Energy Bill, Westminster has already signalled that it is taking action in this area. The Scottish Government now needs to pull its weight, end its fixation with wind power, clarify its contribution to fighting poverty and promote energy efficiency. Under the Housing (Scotland) Act 2001, it has a statutory duty to eradicate fuel poverty. It need not think that it will get itself off the hook by trying to blame someone else.
16:21
In his speech, my colleague Richard Baker mentioned that Dr Brenda Boardman had described the Scottish Government’s approach to tackling fuel poverty as “inadequate”. He was being rather polite, because Dr Boardman actually said that the Scottish Government’s approach was “feeble, inadequate and namby-pamby”. She advised that what the public needed to know was how much solutions would cost and who would pay for them.
In answer to Dr Boardman, the Scottish Government stated that its budget for tackling fuel poverty in 2012-13 was £65 million, which represented a substantial increase on the previous year’s budget, but as my colleague Anne McTaggart pointed out, it failed to indicate that, in that year, the budget had been cut by a third and that this year’s budget is still almost £6 million less than it was in 2010-11.
Although I do not intend to support the amendments of Alex Johnstone and Liam McArthur, I share some of their concerns about the tone and the wording of the Government’s motion, which creates the suspicion that the vital issue of fuel poverty—which should be attracting cross-party attention—is instead being used as an argument in the constitutional debate, and that the Government is more interested in complaining about the powers that it does not have than it is in using the powers that it has. That was completely borne out by Annabelle Ewing’s speech.
In the context of today’s debate, I am not that interested in whether the UK Government is cutting spending on tackling fuel poverty in England. That is not germane to this debate in this Parliament. I am interested in what the Scottish Government intends to do to tackle fuel poverty here in Scotland and how it intends to use the powers that it has at the moment.
Will the member take an intervention on that point?
No, thank you.
Many members have referred to the fact that 29 per cent of households are fuel poor, but we should not forget that the Scottish Government has missed its first climate change target—emissions from homes are 3 per cent higher than they were in 1990. Therefore, the retrofit programme is welcome and, indeed, vital.
The Economy, Energy and Tourism Committee’s report on the draft budget reminded us that, the previous year, stakeholders advised that investment of £200 million would be required if the 2016 target was to be met. They felt that the majority of that sum should come from the public purse.
More recently, Norman Kerr of Energy Action Scotland voiced concern to the committee about the level of expected private sector investment. He did not believe that the budgets—
Will the member give way?
No, I would like to get this finished, please.
Sandra White rose—
The member is not taking an intervention.
I will not take an intervention at this point; I want to finish this part of the speech, please.
Norman Kerr did not believe that the budgets, as they stood, were secure enough to tackle fuel poverty. He felt that it was “a very big ask” to expect £135 million to come from the energy company obligation every year for the next three or four years. He also said:
“If £200 million had been spent every year for the past six years, we would broadly be on track, but we have not spent anything like that in the past six years. Therefore, the £200 million should actually now be £300 million if we are to gain ground and meet the targets.”—[Official Report, Economy, Energy and Tourism Committee, 24 October 2012; c 2079.]
I will now take an intervention from Ms White.
I thank Elaine Murray for taking my intervention. She said that we should talk only about Scotland and that to speak about any other part of Britain, and England in particular, was irrelevant. However, Richard Baker said that he was not interested only in Scotland but in England and the rest of Britain. Is that a sign of a Labour split?
That was a rather feeble intervention.
In any wealthy, first-world country, no one should live in fuel poverty—indeed, no one should live in poverty. My point was that, in a Scottish Government debate about fuel poverty in Scotland, it is not adequate to have a motion that includes a phrase castigating the UK Government’s spending in England. I do not think that that is relevant to what we are talking about.
I join my colleague Neil Bibby in asking the minister whether the investment of £135 million from the energy companies will be achieved this financial year. How confident is she that that and more will be achieved next year?
At the UK level, we have the green deal and the energy company obligation. Labour has been critical of the green deal, which replaces a grant-based scheme with a loan-based scheme. The previous grant-based scheme was not always taken up to the extent expected, and loans are likely to be even less attractive to private individuals, especially at this time.
As Margaret McCulloch said, Labour at Westminster has been pressing the UK Government to better regulate the power companies in order to prevent exorbitant energy price rises.
However, there are some examples of the UK scheme being used effectively.
Will the member give way?
No, thank you.
Labour-controlled Birmingham City Council—
That is in England.
Order.
This is an example of good practice, which I am sure will be anathema to those guys: not only does it involve Labour but it is in England, so they certainly will not want to hear about it. However, I will explain what is being done in Birmingham.
Will the member give way?
The member is not taking an intervention.
Birmingham City Council, in partnership with Carillion Energy Services, is using the green deal scheme to secure a £600 million deal to retrofit 60,000 homes, schools and other council properties by 2020. That is a council using its powers. It is not sitting on its hands and saying, “If we had the powers of a small, independent nation, we would be able to do something.” It is using the powers that it has, getting the money in and trying to make a difference to the citizens of Birmingham.
Will the member give way?
The member is not giving way.
There are other examples of good practice with people taking steps to make a difference. Neil Bibby referred to the switch together campaign, which my colleague, Jenny Marra, has spearheaded in Dundee. It is based on Belgian and Dutch schemes that involve collective bargaining, which Is a good trade union concept. Energy price switching began in 2008, and five Belgian provinces now use gas and electricity collective purchasing schemes, to which 850,000 people are signed up. That is something that councils, registered social landlords and the Scottish Government could do here under existing powers.
Liam McArthur mentioned the problems in rural areas. The fuel poverty evidence review pointed out that 47 per cent of households that are off the gas grid are fuel poor, compared to 27 per cent of those that are on the gas grid. I would like to mention a couple of problems from rural areas in my constituency.
One of my constituents, who is 75 years old and disabled, was accepted into stage 4 of the energy assistance package. Unfortunately, he discovered a—probably inadvertent—form of discrimination against people who are off the gas grid when it became apparent that, because his boiler, which needed to be replaced, was an oil central heating boiler, he would be asked to pay more than £2,000 towards the cost of a new boiler. That was partly because his property was too energy efficient. There are ways in which the current system is working against those in rural areas.
I do not have time to talk about my second example.
This is an extremely important issue. I am disappointed that so many issues to do with the constitution have been dragged into this debate, as they are into every debate that we have in this Parliament at the moment. We should be tactical and concentrate on what we can do now.
You must close.
We should be learning from the good examples in Birmingham and Belgium, and we should be doing what we can to tackle fuel poverty.
16:29
The debate has shown that the issue of fuel poverty is very important and emotive, and that we all feel strongly about it. We have all agreed that fuel poverty is an absolute scourge, that Scotland is an energy-rich nation, and that fuel poverty should simply not be happening here.
I want to pick up on some things that have been said in the debate; I then want to concentrate on a couple of particular issues.
I think that Richard Baker asked how the go-early pilots are going. For £3.5 million of Scottish Government money, the go-early pilots have attracted in a further £13.5 million and £10 million from the local authorities and RSLs. That shows that we are getting more than the 2:1 that we anticipated in the retrofit programme. We therefore believe that we are on target to make the £200 million, as stated.
It has been mentioned a number of times that we should not talk about what the UK Government is doing, because it is doing such marvellous things. The contrast is that the Scottish Government, with the powers that it has, has committed Scottish Government money to the retrofit programme, whereas in England the UK Government has scrapped any support to any energy-efficiency programme from next year. We are getting the story that the UK Government is doing well down south with the money, the ECO and everything else. It is putting nothing into it and is expecting to get a lot back out of it that it cannot say that it will get. We are putting something into the programme. We are running pilots and showing that the targets that we expect to be met are being met.
Elaine Murray said that it was not germane to talk about what the UK Government is doing, but is not the Barnett formula the reason why it is germane to do so? The UK Government is not spending that money in England, which makes it even more difficult for the Scottish Government to find money to spend here.
The member is absolutely right. Fuel poverty is such an important issue and such a priority for me and the Government that we are putting money into addressing it. We have not dropped the money, as Anne McTaggart suggested; rather, we have increased it again. We are spending more in real terms than Labour spent, and we have levered in money.
Will the minister give way?
No. It is my turn. There has been a lot of criticism of the Scottish Government and me in the debate, which I will respond to. That is what I am doing.
I have taken up Richard Baker’s point. I absolutely disagree with Anne McTaggart. We talk about what is happening. With the existing programmes, the Scottish Government has put a considerable amount of money into dealing with fuel poverty. We should not forget the things that we have already done. Some 122,000 households have had assistance, 400,000 houses have been insulated, and 382,000 households have received other forms of assistance. We have a national energy scheme that is assisting people.
The spend in 2011-12 was £53 million. It was cut from 2010-11, from £67.3 million.
We increased our spending to £68 million in this year, and we have levered in more money. That is in our fuel poverty budget. We are also putting money into other energy-efficiency measures, so it is simply not true to say that the Scottish Government is not spending on fuel poverty and fuel poverty measures.
We are supporting families that are struggling. Welfare reform and what the Scottish Government is doing about that have been mentioned a number of times. We have been asked what we are doing with the powers that we have. We have done a lot in welfare reform with those powers. We have the Scottish welfare fund, and we have protected people on council tax benefit. We have the social wage, and we are protecting people with free prescriptions. We are doing a lot for people. We are doing what we can with our powers to ensure that their incomes are not reducing any further.
The poor always got free prescriptions. The policy change resulted in the minister and me getting free prescriptions.
This debate is about fuel poverty, but I will answer that point. My point is that people who were on the edges or the margins, such as people who were off work, lived only on incapacity benefit and needed several prescriptions a month, had to pay for prescriptions, but they do not now. That is the reality. It is not just about people like the member and me; it is about people who are really struggling on low incomes. Some members should think about that.
The one thing on which I agree with Liam McArthur is that we both feel passionately about fuel poverty. I did not agree with much else that he said, although he made good points about fuel poverty being much higher in rural areas than in some urban areas. We recognise that and we have a number of schemes to help rural areas. The national retrofit programme is being done on a scale, but we recognise that we need to look at ways of protecting rural areas.
I am grateful to the minister for taking yet another intervention.
I raised the specific issue of considering ways in which community groups or local councils could harness renewable energy resources—which are prevalent in my constituency—as a way of providing cheaper electricity to fuel-poor households. The issue has been raised with the fuel poverty forum. Will the minister take away that suggestion and work with Professor Sigsworth on how it might be delivered?
I am willing to consider any ways to reduce energy bills for people anywhere in Scotland, so I will look at that.
We will do all in our power to maximise income and assist households to access lower tariffs and reduce their energy bills. We are also asking the UK Government to do more with the big companies to ensure that prices are better regulated and that people get a better deal on tariffs. Members have mentioned the variety of tariffs. Ofgem has recommended that the number of tariffs be reduced to four, which we support, and we will push Ofgem to get that through as quickly as possible, because lower tariffs are important.
It is important that people understand the tariffs that they are on and what they mean. I recently spoke to a constituent of mine whose fuel provider had explained to her that she could get a better tariff that would be fixed for a year and so would not increase. She went along with that, but she did not understand that, although the price of a unit of fuel would not increase, that did not mean that her direct debit payments would not increase during the year. We must realise that many people do not understand that. That is a difficulty. We want to ensure that people, particularly vulnerable people, understand their tariffs and know which is the best one for them. That is why we support the roll-out of Citizens Advice Scotland’s energy best deal plus programme. We hope to have positive news on that soon, as we are actively talking to Citizens Advice Scotland and fuel suppliers about that.
As I said, we are pressing Ofgem to deliver a simpler, clearer, fairer and more competitive energy market for consumers. We will continue to provide support through the home energy Scotland hotline and through the energy advice and tariff and benefits checking that form stages 1 and 2 of the energy assistance package. Through the benefit checks that are provided by the energy assistance package, we have already saved households more than £5 million, or increased their income by £5 million. That is important and it will continue.
We continue to take advice from the Scottish fuel poverty forum on progress towards the 2016 target and the most effective means of targeting our support.
Will the minister give way?
The minister is concluding.
I am about to close, or I would have given way.
We will continue to work closely with the fuel poverty forum on how we can get towards the target. Meeting the target is a challenge but, as I said at the start of the debate, we will not shy away from it. We will take it on because, as we all agree, the issue is important.
Am I running out of time, Presiding Officer?
Could you come to a conclusion, please?
We are fully committed to tackling fuel poverty.
I am whipping through the pages of my speech, but I will conclude. Within the powers that we have, we are dealing with the issue that we can deal with, which is energy efficiency. We cannot deal with all the drivers of fuel poverty. We have heard that the two main causes of fuel poverty are the rise in fuel prices and low incomes, but those matters are outwith the Parliament’s control. Therefore, the Government is right to say that, if we had full powers, we could work with the companies. We are an energy-rich nation. We should say that independence would be better for the people of Scotland and that they would have better fuel prices.
You must finish now, minister, as we have another debate after this one.
We are tackling fuel poverty from every angle possible and we will continue to do so until the battle to end fuel poverty is won.