Energy Bill
The next item of business is a debate on motion S3M-7945, in the name of Alex Neil, on the Energy Bill, which is proposed United Kingdom legislation.
17:30
This is a rather versatile day of business, Presiding Officer.
I welcome today’s opportunity to highlight the benefits of the UK Energy Bill, in particular the green deal policy benefits that can be brought to Scotland. The Energy Bill had its first reading in the House of Lords on 8 December 2010, had its second reading on 22 December and has now completed its committee stage. The report stage will begin on 2 March.
I assure the Parliament that the Scottish Government is working closely with UK Government ministers and officials on the content of the bill. We have negotiated a number of changes to ensure that Scottish circumstances have been taken into consideration and written into the text of the bill, and I sit on the green deal ministerial oversight group.
Many of the bill’s provisions are reserved to the UK Parliament, and we are principally concerned with those provisions that fall within the devolved competence of this Parliament, particularly those that come under the legislative consent motion that is required to allow the UK Parliament to legislate on these matters.
Rest assured that the LCM is not a blank cheque to allow the UK Government to implement the green deal in a manner that disadvantages Scotland. We will be actively involved in the development of the policy at every stage in the future, as we have been recently, and we will ensure that the requirements of Scotland are recognised.
I will now give the Parliament a brief overview of those provisions that are devolved and of the Scottish Government’s views on them. First, the green deal and the energy company obligation—the ECO—provide the opportunity for significant investment in sustainable energy measures. We need to ensure that as much of that investment as possible comes to Scotland to top up what we are already doing and will continue to do ourselves. Many of the finer points of the initiatives will be outlined in secondary legislation following the passage of the Energy Bill, so we do not yet have the answers to specific questions about targets and how they will work in rural areas. Members should rest assured that we will continue to work closely with the UK Government as the bill is developed to ensure that its provisions are designed and delivered to recognise issues that are specific to Scotland.
Given the close involvement that the minister is suggesting the Scottish Government should have with the green deal and its implementation, can he set my mind at rest on a few points as to why we should vote for the LCM? The green deal does not seem to be offering loans at anything cheaper than market rate, so I am left wondering what the “deal” bit of the green deal is all about.
The subordinate legislation that the minister mentions is due to be handled at Westminster, I understand, so—
I must hurry you, Mr Harvie—we have little time.
What opportunity will this Parliament have to ensure that the new arrangements are more suitable for allowing additional action in Scotland than the previous arrangements were?
Mr Harvie should listen to what I have to say, as I am sure that I will be able to reassure him on all points.
The stakeholder input and the views of the Economy, Energy and Tourism Committee will be extremely valuable to us as we present to the Department of Energy and Climate Change what it is that Scotland wants from the initiatives. DECC held its first stakeholder event on the ECO last week, and it has given a commitment to take away the comments and issues that were raised and to feed them into the development of the policy.
The private rented housing sector is key to ensuring that Scottish ministers can influence delivery in respect of key devolved aspects of the policy, including those that affect the private rented sector. The Scottish Government is committed to ensuring that all Scottish building owners and tenants have full access to UK Government energy efficiency programmes, including the green deal, as well as to our own programmes in Scotland.
Will the minister take an intervention?
I am sorry, but I do not have time.
We note the UK Government’s proposals to introduce new powers to regulate private landlords, to ensure that private tenants can access energy efficiency improvements to their homes through the green deal. We note that regulation in that regard would not be in place in England until 2015 at the earliest.
The Scottish ministers already have powers to enable the regulation of energy efficiency across all tenures, under the Climate Change (Scotland) Act 2009. The new powers that are offered through the LCM would not alter or weaken existing legislation-making powers but would expand the options that are open to us. We will therefore consider the UK Government’s proposals in the context of our powers and the needs of the people of Scotland. We will make a statement on our position in respect of the use of our regulation-making powers in the 2009 act by the end of March.
The proposal to deliver the green deal by building on the current system of energy performance certificate assessments is not a barrier to implementation in Scotland. The bill will enable delivery of that intent. The Scottish Government will continue to work with Whitehall to ensure that subsequent framework regulations, which implement the green deal, recognise and accommodate differences in process in Scotland. I confirm that there is scope for looking at improving the information that is presented in, for example, the energy report that the energy performance certificate process produces. However, until the requirements of a green deal assessment are set out in detail, we cannot determine what additional measures might be needed.
You must close now.
I will cover the repeal of the Home Energy Conservation Act 1995 in my closing speech.
I am sorry to hurry members, but there is no time available.
I move,
That the Parliament agrees that the relevant provisions of the Energy Bill introduced in the House of Lords on 8 December 2010 relating to the creation of powers to develop a new Green Deal for energy efficiency measures, the repeal of the Home Energy Conservation Act 1995, enabling the Coal Authority to charge for services and to implement additional measures to make improvements to regulatory frameworks for the energy markets, so far as these matters fall within the legislative competence of the Scottish Parliament, or alter the executive competence of the Scottish Ministers, should be considered by the UK Parliament.
17:36
The policy objectives of increasing energy efficiency and reducing fuel poverty are widely shared. The issues that we consider today are whether the bill that the Westminster Government has introduced will add value to existing legislation and whether the Scottish Government is right to give the bill its whole-hearted support, especially given that the minister has conceded that much of the substance will not appear until secondary legislation is produced.
Members of the Economy, Energy and Tourism Committee took evidence on the bill from non-governmental organisations that work in the field and from the Scottish Government. It was hard to avoid the conclusion that even Mr Neil found it hard to understand the purpose of some parts of the Westminster bill that he was defending.
Friends of the Earth Scotland went further. In a briefing paper this week, the organisation urged us to refuse to allow the reappropriation by the UK Government of measures to tackle energy efficiency in the private rented sector and fuel poverty. It is perhaps surprising that Scottish National Party ministers are unconcerned that such views are being expressed in the sector in Scotland.
Alex Neil will recall being asked by the committee what chapter 3 of the Energy Bill will add to the toolkit that is available to the Scottish ministers under the Climate Change (Scotland) Act 2009. He said:
“Chapter 3 will give us a specific power to regulate the private rented sector. We believe that, in effect, we already have that power under the 2009 act.”—[Official Report, Economy, Energy and Tourism Committee, 2 February 2011; c 4751.]
It is hard to see why ministers are keen for Westminster to legislate on the private rented sector, if that will only duplicate measures that have been agreed by all parties in the Scottish Parliament and put in statute.
I heard the evidence that was provided to the committee. We were also told about a specific provision for tenants, which is distinctive. Will the member comment on that?
The provisions include a responsibility on the tenant to request improvements—not on the landlord to offer them. Also, the powers on energy efficiency in the private sector are limited by clause 50, which provides that they may be exercised only if they
“will not decrease the number of properties available for rent.”
If that is what ministers want, surely it would be better for them to explain that in the context of Scottish legislation as it went through the Scottish Parliament.
When he gave evidence to the committee, Alex Neil defended the proposed repeal of the Home Energy Conservation Act 1995, which requires local authorities to set targets in promoting energy efficiency. He said that not enough councils meet their HECA targets. However, a number of Scottish local authorities have used the targets effectively to make a difference to people who are living in fuel poverty. Scottish Environment LINK told the committee on 26 January:
“We strongly believe that that act should not be repealed; rather, it should be amended or replaced with a duty on local authorities to have targets to achieve energy efficiency in the private housing sector in their areas and to report on the achievement of those targets.”—[Official Report, Economy, Energy and Tourism Committee, 26 January 2011; c 4719.]
Other organisations reiterated the point this week. WWF Scotland, for example, pointed out that the proposals in the Scottish Government’s long-delayed energy efficiency action plan
“only extend to strengthening guidance for Local Housing Strategies and there is no requirement or duty to promote energy efficiency.”
At the very time when we should be looking for ways to build on the successes of earlier efforts to improve energy efficiency, ministers in both Governments focus instead only on the deficiencies in HECA in order to remove and not replace an existing statutory duty.
The Scottish ministers should put pressure on the UK Government on proposals that are not yet fully formed, as the minister said. We also want the green deal and the energy company obligation to be amended to deliver for Scotland. If they threaten to take us in the wrong direction altogether, they should be rejected.
17:40
I intend to focus my remarks on the issues on which the committee took evidence and on which there appeared to be some dispute, at least initially.
The first of those is the repeal of the Home Energy Conservation Act 1995, which everyone calls HECA. It was suggested that there was a dilution of the provisions because a duty under HECA would become guidance and reporting in a local housing strategy. However, even those who suggested that could see that there were enormous flaws in HECA. Elizabeth Leighton, who gave very good evidence on behalf of Scottish Environment LINK, said:
“We can certainly consider alternatives to HECA, because the reporting requirements alone are enough to drive local authority housing energy officers crazy.”—[Official Report, Economy, Energy and Tourism Committee, 26 January 2011; c 4731.]
There are enormous deficiencies in HECA. For example, there are no consequences for a local authority if it does not achieve the indicative targets that are set. We heard evidence that only nine out of the 32 local authorities had hit those targets. There appears to be a broad consensus that HECA is not fit for purpose.
Does Gavin Brown accept that there is also a broad consensus on the need to replace HECA, rather than simply to repeal it, as is proposed?
I accept that there is a broad consensus that we need to ensure that energy efficiency continues to be a focus for local authorities. Norman Kerr, who took a balanced view throughout, stated:
“Should it be repealed, it will be important to replace it, perhaps with other duties in local housing strategies that will continue to make fuel poverty and energy efficiency a focus for local authorities.”—[Official Report, Economy, Energy and Tourism Committee, 26 January 2011; c 4720.]
The combination of the Scottish housing quality standard and the fuel poverty element of local housing strategies in action so far has probably had a bigger effect than HECA. If they were to be strengthened, they would probably have a bigger future effect than HECA. On that basis and having listened to the evidence, I am not concerned about the repeal of the act.
The other issue concerned the private rented sector. Concerns were raised about the interplay between section 64 of the Climate Change (Scotland) Act 2009 and chapter 3 of the bill. The minister gave us a point-blank assurance that there would be no negative impingement—that question was put to him directly and he answered.
The Government’s legal representatives also gave us a deeper understanding. They stated that, although there is much in chapter 3 that is similar to the Climate Change (Scotland) Act 2009, it contains provisions that give the Scottish Government new powers, albeit subtly, to confer duties on local authorities to serve notices and provisions that deal with tenants. It was stated clearly that the provisions on tenants distinguish chapter 3 of the bill from the 2009 act.
Having had some initial reservations, after examining the Scottish Government’s background paper, I think that the charges have been answered. On that basis, the Conservatives will support the LCM at decision time.
If there is a lesson for the Scottish Government, it is that it would be better to put all the issues into the background paper that goes initially to the relevant committee. The minister answered all the points during his oral evidence, but it would have been better to have had that information in the background paper so that we could have been aware of the issues prior to taking evidence.
17:44
I am a little puzzled. I certainly appreciate and share the desire to keep fuel poverty at the front of, and central to, political debate in Scotland. Likewise, we should keep central the challenge to bear down on harmful emissions and improve energy efficiency. However, it is impossible to escape the feeling that Lewis Macdonald and his colleagues are perhaps playing politics with the motion. Do I believe that the green deal is the last word in tackling the scourge of fuel poverty that does so much to scar this country? I do not, and further work is certainly needed to ensure that it dovetails effectively with other measures that are being taken.
Will the member give way?
I will let in Lewis Macdonald in a second.
WWF makes sensible suggestions in its briefing regarding the development of EPCs and the energy company obligation, for example.
I certainly believe, however, that the green deal has an important role to play in unlocking potentially billions of pounds of investment, creating thousands of jobs, helping to insulate millions of homes throughout the UK and improving the energy efficiency not only of homes, but of our businesses and workplaces.
Does Mr McArthur have a view on why the bill has come forward at this stage, when it is apparent from everything that we have heard that many of the provisions have not yet been fully formed and are not intended to be produced before the bill has completed its passage through Westminster?
A framework has clearly been set, and the minister has addressed the issue of how Scottish interests will be represented through the continuing stages of the process, so I take reassurance from that.
WWF also states:
“The UK Energy Bill contains several provisions that could dramatically enhance domestic energy efficiency activity in Scotland”,
including the green deal and the ECO.
It seems clear that rather than closing off options for taking action as some have suggested, the bill and the motion do quite the reverse. It is my understanding that by agreeing to the motion today, the Parliament will enhance the suite of options that are available to Scottish ministers to act, as the minister reiterated a number of times in his speech.
At a time when we face high and spiralling fuel prices, the bill is a good thing in terms of its substance and the urgency that it shows on the part of ministers. At a time when budgets are tight and set to remain so for some time, an innovative financing mechanism that will allow domestic consumers and businesses to pay back the cost of energy efficiency improvements through their energy bills, thereby reducing or removing up-front costs, is surely worthy of welcome.
UK ministers have made clear that there will be additional help for lower-income and vulnerable households and hard-to-treat-properties, following on from the refocusing of the carbon emissions reduction target and the smaller and more targeted warm front programme. Again, I assume that Scottish and UK ministers and their officials will need to continue to work closely on the detail of that.
I am pleased that attention is being given to the private rented sector, in which, as I think we would all acknowledge, far more significant improvements in energy efficiency need to be achieved. Again, the detail will need to be thrashed out over the coming months. The suggestion that it may not be possible post-2015 to refuse any tenant who requests a green deal could well go some way towards triggering such an improvement.
Moreover, Chris Huhne confirmed to the Economy, Energy and Tourism Committee that this Parliament’s Climate Change (Scotland) Act 2009 could be used in relation to the private rented sector
“to prod the green deal into action.”—[Official Report, Economy, Energy and Tourism Committee, 12 January 2011; c 4571.]
That is welcome, and is further proof of the complementary nature of the tools that are now at ministers’ disposal.
I am aware of the concerns that have been raised by environmental groups—and again this afternoon—regarding the repeal of HECA. However, a consultation in 2007 showed that two thirds of respondents agreed that HECA should be repealed because it was no longer useful as a driver to improve energy efficiency. Gavin Brown has reiterated some of the concerns that were expressed to the committee in that regard.
I entirely accept that there is a role for such a driver, and the green deal can go beyond what HECA was able to achieve; Norrie Kerr has offered some balanced and constructive proposals in that regard. Given the track record of some local authorities in that area, there is cause for reasonable optimism about how that might be made to work. It is also—
You should close, Mr McArthur.
On that basis, I will support the motion this afternoon.
I am afraid that contributions must now be limited to three minutes.
17:48
I have pleasure in supporting the Government’s position this afternoon. Having heard the arguments in the Economy, Energy and Tourism Committee, I am glad that we have agreed that the LCM and the Energy Bill will not impinge on the powers that we have under the 2009 act, which is ours in Scotland and which gives us wide opportunities here.
As we discussed in the committee, the green deal can create many jobs: up to 10,000 jobs may be created in Scotland from the work that will ensue. We therefore have to give it some kind of fair wind.
As for higher fuel bills, the question of how far we can deal with the situation in Scotland is helped by the fact that our ministerial team has ensured that discussions on how the money will be allocated in due course have from an early stage involved our civil servants.
It is not unusual for the detail of such a large bill to be fleshed out in secondary legislation. After all, that happened with the Climate Change (Scotland) Bill, and it happens with practically every bill that is passed by the Scottish Parliament. I do not see what the problem is for Labour—other than the issue that I will deal with in a minute.
Will the member give way?
I am sorry—I do not have time.
As far as HECA is concerned, the Government believes that we will increase the degree of effort that we make on energy efficiency by raising the housing quality standards that will be demanded after 2015; indeed, there are already much tougher quality standards in place. To answer the question whether HECA is any use, most of the people who responded to the consultation on the energy efficiency action plan did not think that HECA was important in gathering information or facilitating energy efficiency work.
What is in the Energy Bill that is a problem for Labour? If there had been better relations between the previous Administration and the Government in London on some of these issues, that would have been wonderful. As I have mentioned, we now have better relations with the UK Government, but everyone needs to realise that the sharing of responsibility for energy efficiency and energy itself between Westminster and Scotland is what causes the problems when it comes to whether we think that the UK Government is going to do enough, which is the basis of the debate. I have not seen any Scotland Bill proposals from Labour to bring energy powers to Scotland, but let us discuss that on another occasion.
17:51
I have read the Official Reports of the evidence sessions and the submissions that were made to the Economy, Energy and Tourism Committee, and I agree completely with the concerns that Lewis Macdonald raised. If we are to tackle fuel poverty, concerted action needs to be taken at every level of government.
The Energy Bill is important because it will set the UK framework. I say up front that there is much in the bill that Labour can support, but we are not uncritical. We support the concept of the green deal, but we think that commentators have raised legitimate issues that need to be addressed. I make the point to Liam McArthur that it is legitimate to make constructive criticism.
There are some aspects of the bill’s proposals that we believe would be a step backwards. In particular, we agree with Friends of the Earth and WWF that the repeal of HECA must not happen without a new duty being put in place. If HECA is to go, we need to know what will replace it. It is not good enough to say that something will happen. It is possible to design something that would still be a duty, but that is not on the table; I am surprised that Alex Neil did not even mention that.
It is not about local authorities having to do all the work themselves; it is about them being able to set the priorities. They have the local knowledge and the housing stock, so they are best placed to act, but they need to be able to set the priorities. The climate change legislation targets will not be met just as a result of central Government demanding that they are met. Local authorities are crucial.
Will the member give way?
I am afraid not, because we are all running out of time.
I want the minister to give us an assurance that he understands the points that have been made. HECA may not be perfect, but it is better to have the present duty than to have nothing. We have not been promised anything, which is why we are putting pressure on the minister and the Government.
I want an assurance that the provisions in the Climate Change (Scotland) Act 2009 on our private rented sector will be respected and will not be watered down by the Energy Bill. It is difficult for all of us to get into issues that are quite substantive in three or four minutes. That is why we are exerting pressure. If we do not do so today, there will be silence on those issues. It is not our job to allow difficult issues that people have raised not to be mentioned in this Parliament.
We need to step up a gear on the energy efficiency regimes that we have in Scotland, and we must ensure that nothing in the Energy Bill inadvertently undermines that work. We must step up that work. We know that we must do more, which is why we need robust action by the Scottish National Party Government.
The minister does not have until the end of March to tell us what he intends to do on section 64 of the 2009 act; he has less than 20 parliamentary days to come up with a statement.
It is imperative that we create opportunities for energy efficiency and renewables so that people can insulate their homes and bring down their energy bills. That is why the detail of the golden rule is crucial. We need to know what is in the deal and what is not. People who make the kit are already asking us whether windows are in it. It is important that such details are raised. We support the idea of the green deal, but we need the detail to be right, which is why we are asking questions today.
17:54
The Economy, Energy and Tourism Committee took evidence on the legislative consent memorandum because we recognised the Energy Bill’s importance in a UK context and to Scotland specifically. We took evidence from a number of voluntary and other organisations that have a particular interest in fuel poverty and energy efficiency issues. We also had a session with the minister, who was able to respond to a number of the points that were raised during those sessions.
It is fair to say that there are concerns about the implications of the Energy Bill. It is a substantive piece of legislation that significantly changes the way in which we deal with such issues throughout the UK. Of course, it was not a matter for the Economy, Energy and Tourism Committee to consider the UK-wide policy, but we considered the implications for devolved issues in Scotland. We looked at the impact on the energy company obligations, at whether they will address Scotland’s different energy requirements and the fact that the way in which we treat the heating of housing has to be different, and at whether those points will be taken into account in a way that they were not under the previous carbon emission reduction target scheme. We have received an assurance from the minister that his officials are discussing the detail of the bill, which will try to ensure that the new obligations will take Scotland’s particular needs into account when the new schemes are being designed. That is a fundamental step forward from where we were because it puts Scotland in on the ground floor in developing those schemes to benefit Scotland, rather than trying to retrofit a scheme that fails to deliver for Scotland, which was the truth about CERT.
I was concerned about whether the section on the private rented sector should be included in the bill. That point was raised in evidence to us and we put those questions directly to the minister, who responded that its inclusion does not take away anything from the provisions in the Climate Change (Scotland) Act 2009, but puts additional tools in the toolkit. On that basis, the committee was willing to accept that part of the bill.
Different views were expressed about HECA, but the fundamental point is that no one provided any significant evidence that HECA drives forward energy efficiency. What is the point of having a piece of legislation on the statute book if it does not do anything useful? There are other pieces of legislation, including the Climate Change (Scotland) Act 2009, that can do that.
I have one more significant concern, which I hope that the minister will address. It is about the bill’s timetable and how it will be progressed. As the Parliament goes into dissolution on 22 March, the Energy Bill will still be going through the UK Parliament and it will be subject to amendment. We need to know how that will be addressed. If the bill is passed at the UK level, how will regulations to which Scottish ministers will have to give consent be brought back to the Scottish Parliament for consideration?
17:57
In the three minutes that I have, I will try to cover as many points as I possibly can.
I take on board Gavin Brown’s point about background papers. We will ensure that what he suggested happens in the future.
I make it absolutely clear that it is not just my officials who are in touch regularly with DECC: we have two officials working inside DECC on behalf of Scotland, and I am in regular contact with Chris Huhne, as well as being a member of the oversight group. The level of co-operation between ourselves and London on the issue is therefore unprecedented.
Lewis Macdonald said that we have to have HECA or we will have nothing. The reality is that two thirds of the local authority areas in Scotland have nothing, because they have not implemented HECA. Between the UK bill, as it will be adapted for Scotland, as well as the climate change legislation and the fuel poverty measures that we have taken, we have in place a far better system for tackling energy efficiency and fuel poverty than HECA could ever provide.
Will the minister take an intervention?
Unfortunately I have only three minutes, otherwise I would have been delighted to take the member’s intervention.
I come to the green deal and the energy company obligation, which basically replaces the CERT system—a Labour measure that has become a dead CERT. The amount of investment that CERT makes in Scotland is substantially less than we anticipate getting through the ECO. That will be a major boost to investment in energy efficiency in Scotland.
Similarly, if we did not take advantage of the green deal in Scotland, we would be denying thousands of people the opportunity to get the money that they need at relatively low interest rates so that they can invest in their properties and make them much more energy efficient.
The green deal is a good deal for Scotland, and it will create 10,000 new jobs in Scotland. I find it incredible that the Labour Party and the Greens will vote against the motion and try to deny Scotland and unemployed people in Scotland the opportunity to have 10,000 new jobs. When those members go into the election, we will remind them that they voted against those jobs. If Labour’s policy was the pathetic announcement on Monday, which is a tiddlywink approach to energy efficiency in Scotland, it has no case whatsoever. We are well ahead of the game and are, as always, working with our friends in London to deliver for the people of Scotland.