The next item of business is a debate on motion S4M-09747, in the name of Jackie Baillie, on fuel poverty. I give warning that we are extremely tight for time for both debates this afternoon, so we will keep members to their times. I regret that we will be unable to offer any additional time if members take interventions.
14:40
I welcome the opportunity to debate fuel poverty. It is well over a year since we debated the subject in the chamber and I am disappointed that it has taken the Opposition rather than the Government to set time aside.
Our debate comes when fuel bills have been dropping through letterboxes across the country over the past month, and there is nothing like an electricity or gas bill to focus minds, although many people do not have even that choice, as they need to pay up front through prepayment meters. The winter was relatively mild, but people are struggling to pay their fuel bills because of the huge increases in prices. We should make no mistake: such people are not just experiencing fuel poverty; they are plunged into fuel debt—they are facing the worst cost-of-living crisis, the likes of which we have not seen in decades.
I will turn to the scale of the problem. Citizens Advice Scotland has estimated that, between October 2010 and September 2013, price rises from the big six energy firms were eight times higher than the increase in average earnings. CAS also estimated that, by January 2014, the big six suppliers had increased their prices by about 37 per cent, which completely outstripped the 10 per cent inflation rise and the 4 per cent rise in average earnings.
If members need further evidence, research from the Department of Energy and Climate Change indicates that household bills have increased by more than £300 in a mere three years, while small businesses’ energy bills have risen by more than £3,000. There is no doubt that costs are going up at an alarming rate.
We also have the Scottish Government’s most recent estimate that there are 647,000 fuel-poor households in Scotland. However, that figure is not up to date. It takes us only to the mid-point of 2012 and it fails to take into account the inflation-busting increases in energy bills.
Energy Action Scotland has used the Government’s basis of calculation and believes that the figure is nearer 900,000 fuel-poor households. In the recently published “UK Fuel Poverty Monitor 2013-2014”, Energy Action Scotland estimates that the figure could be just over a million, which is staggering. When we consider that there are about 2.4 million households in Scotland, that means that 40 per cent of all households are affected by fuel poverty. That is the highest figure that I have ever known. It is truly a national scandal that so many people are forced to choose between heating and eating.
Scottish Labour believes that a warm, dry home is a basic human right and that fuel poverty has no place in a civilised, first-world country. I am sure that that view is shared across the chamber. That belief motivated us to introduce the Housing (Scotland) Act 2001. Our commitment was to end fuel poverty by 2016. That was an ambitious target, but rightly so. Supported by all parties, it provided a sharp focus on what mattered and posed a challenge to all of us to deliver on it. We had faced levels of fuel poverty that meant that some 700,000 households were affected. Through our concerted efforts, that dropped to 200,000 households by the end of 2002. Fuel poverty has since been on the rise—most sharply in 2009—and now, in 2014, it is at the highest level ever, of almost 1 million households.
The problem is acute, yet there is much more that we can and should be doing. I say with the greatest respect to the Minister for Housing and Welfare that the problem demands more than a Government amendment that is breathtakingly complacent and focuses yet again on independence. I suppose that that is no surprise. The Government’s press release blames the Tory United Kingdom Government, which is no surprise either. Where is the ambition in the amendment? Where is the recognition that the Scottish Government has a responsibility to help people now? Where is the action to tackle the plight of people who are crying out for help? It should give us all pause for thought when people return food to food banks because the cost of fuel means that they cannot afford to turn on their cooker.
I would understand the Scottish National Party blaming others if it were straining every sinew to tackle the problem, but that is—frankly—not the case. It is the case that the SNP has underspent its budget, apparently for two years in a row. It is the case that the SNP has delayed in delivering money to local authorities although, thankfully, it has allowed them to carry money forward—otherwise, the underspend would be huge. Meanwhile, installers are going to the wall.
Jackie Baillie will be aware that the Scottish Government has committed £60 million to local authorities. What figure would the Labour Party commit?
We would seek to match that, but we would go further. I invite Jim Eadie to read our challenge paper on fuel poverty, in which we set out a range of measures that we would take. The issue is not about doing just one thing; it is about ensuring that we get the money out the door.
In her amendment, the minister boasts about the size of the budget, but the truth is that it is about £70 million to £79 million a year rolled up over three years to look like a big figure. As Energy Action Scotland and others have said, the reality is that the Government needs to spend four times that amount if it is to have any hope of meeting the 2016 target. In any case, the Government seems to have a problem—I hope that Jim Eadie acknowledges it—with getting money out the door at a time when no one can deny the scale of need.
We have the changes to the energy companies obligation that the Conservative Government has made. The situation is not ideal, but the Scottish Government has known about those changes for a while and has done little to counter them. There is no challenge from the Scottish Government to the big six. To be frank, the annual tea and buns with the minister and cosy chats will no longer do.
The suggestion that independence will solve all the problems is nonsense. We need only look at renewables. I support renewables and investment in them. We do very well with investment in renewables from the UK Government and get substantially more than our population share. The last time that I looked, we received a third of all investment, yet our population share would be one tenth. In an independent Scotland, the burden of renewables investment would fall on Scottish consumers alone, which would increase the average household energy bill by £875 a year. The minister shakes her head, but that is from an independent report by Citigroup. I will send her a copy so that she can read it.
The Scottish Government’s response is simply not good enough. If we look carefully at the report by the Scottish fuel poverty forum, we see that even it tells us so. The forum’s report touches on whether the Government should change the definition of fuel poverty. The minister ruled out any change to the definition in a previous debate, but any change would be a truly pathetic response to a national scandal on the scale that we are seeing.
We know that fuel poverty disproportionately affects low-income and fixed-income households, the elderly, children and those who are suffering from illness. It is a particular problem in rural areas and in the private rented sector. We need to do more to ensure that rural, remote and off-gas-grid areas are better served by the main fuel poverty programmes. I understand that legislation to set minimum standards of energy efficiency in the private sector is planned for 2018, but that could be done much more quickly. It looks as though the rest of the UK will have that in place long before us, so there is no reason for delay.
Labour has published a fuel poverty challenge paper that is full of policy ideas and suggestions. We worked with those in the sector who know what needs to be done and our proposals are shaped by their experience. At a UK level, Labour has pledged to freeze energy bills while reforming the energy market and creating a tough new regulator in place of the Office of Gas and Electricity Markets. It is estimated that such a freeze would save consumers £120 and businesses £1,800 a year.
The real prize is reform of the market and not simply moving green levies from bill payers to taxpayers, which is the SNP’s proposal. Wholesale costs account for half a bill and green levies account for a fraction of it. SNP MPs singularly failed to support a price freeze when it was debated at Westminster. It is clear—to me, at least, but increasingly to the country—that the SNP is siding with the big six energy companies rather than the ordinary people who are struggling to pay their bills.
There is much that we in Scotland can do. Labour’s challenge paper sets out a raft of measures that we could take, including everything from an ambitious house-building programme that would increase the number of energy-efficient homes across the country to paying the living wage to those on the lowest incomes, as well as action on rural areas, the private rented sector, microgeneration and prepayment meters.
Will the member take an intervention?
Jackie Baillie is in her last 10 seconds.
We all know the connection between fuel poverty and poverty in general. Given the scale of the scandal that we face, I ask the minister to rise to the challenge and set up a taskforce to work with us all across the Parliament to tackle urgently the scourge of fuel poverty. By working together, we can put in place the measures that are needed to end fuel poverty by 2016 and make a difference to people’s lives.
I move,
That the Parliament notes with concern rising energy prices in the UK, which have increased by over three times the rate of inflation; further notes that many families and older people are now being forced to choose between heating and eating; understands that fuel poverty, as estimated by Energy Action Scotland in its report, UK Fuel Poverty Monitor 2013-2014, is thought to affect 900,000 households in Scotland, approximately one third of the population; commends the UK Labour Party for pledging to freeze gas and electricity prices until 2017 and reform the energy market, which will offer hope to people experiencing a cost-of-living crisis, and believes that the Scottish Government will not meet the target of eradicating fuel poverty by 2016 and is consequently failing the many people living in fuel poverty in Scotland.
14:50
I welcome the opportunity to outline the actions that the Scottish Government has taken and continues to take to combat fuel poverty. The Scottish Government has a clear vision—that every one of us should live in a high-quality, sustainable home that we can afford to heat. I agree with Jackie Baillie on that point. However, she spoke as if we work in isolation on the matter. She mentioned that the Labour Party works with stakeholders, but we too work closely and collaboratively with stakeholders, including the independent fuel poverty forum.
We took on board every one of the forum’s recommendations following its previous review of Scottish Government policies and how we are meeting our targets, and we are looking closely at its current recommendations. In its last report, it acknowledged our commitment to eradicate fuel poverty through support and funding. That funding is a much-needed lifeline for the many householders who cannot afford to heat their homes properly.
The Scottish Government has delivered energy efficiency measures to more than 600,000 households, so one in four households have benefited from that support. The latest statistics show that, in mid-2012, 74,000 fewer households were in fuel poverty than in October 2011. Improved energy efficiency measures account for two thirds of the fall. However, we agree that 647,000 households are still struggling to pay their fuel bills. Those are the latest official figures and we work on official figures.
Does the minister accept that those official figures do not take into account any of the huge, inflation-busting increases from the big six energy companies?
I accept that the official figures are just what I say they are—official figures. They are all that we can work on. Whenever the Government cites figures, it uses the official published figures.
It is clear that a lot must still be done to tackle fuel poverty and it remains a priority of the Government to work closely with the fuel poverty forum. However, our powers are limited. We have control over only one of the contributing factors to fuel poverty—the energy efficiency of dwellings. We need more powers—the powers that independence would bring—to tackle all the causes of fuel poverty much more directly, to deliver Scottish solutions to Scottish problems and to ensure that energy companies always behave in a socially responsible way to protect vulnerable customers.
Over the period 2013-14 to 2015-16, the Scottish Government is committed to spending almost £250 million on addressing fuel poverty and energy efficiency. That funding is crucial to meeting our objective to lever in as much additional funding as we can from the energy companies obligation, local authorities’ resources and European funding. By doing so, we will maximise the investment in delivering energy efficiency measures, increase the number of homes that we can help out of fuel poverty, reduce carbon emissions and create much-needed employment in the green economy.
This year, we have allocated £79 million through our home energy efficiency programmes for Scotland. That is 40 per cent higher in cash terms and 17 per cent higher in real terms than the previous Scottish Labour Administration’s budget of £56.5 million. We are spending far more money on fuel poverty measures than any previous Labour Administration in the Scottish Parliament spent.
The HEEPS initiative provides support to communities across Scotland and allows the most vulnerable residents access to a range of measures that will make their homes warmer and more energy efficient. Through our home energy Scotland hotline, we provide free and impartial advice and support on all our programmes to assist people through the process. I have visited a number of HEEPS projects and have spoken to residents who are benefiting from them. I am always impressed by the positive response not only to the fact that they have a warmer home and reduced fuel bills but to the difference that has been made to the external part of their property, which helps to regenerate the community and make it a more attractive place. We are working hard on that.
However, the changes to the energy companies obligation that the UK Government proposes will make it much harder to bring such benefits to our communities. The UK Government’s analysis states that its proposals will reduce energy companies’ spending on ECO by about £500 million a year across Britain, which represents a reduction of about £50 million a year in Scotland. That could result in up to 1,300 fewer jobs in the low-carbon economy because of a shift away from dealing with hard-to-treat cavities and providing the solid-wall insulation that is needed in Scotland in favour of cheaper measures.
Despite the UK Government’s changes to ECO, we remain on track to deliver all our funding allocation and we are increasing the maximum value of grant support to homes to mitigate the impact of the changes. [Interruption.] Jackie Baillie has something to say about that, but we have got our money out. The provision of the funding was delayed at the start of last year because the UK Government did not publish its guidelines on ECO and the local authorities had to undertake procurement, but this year we have got the funding out. In March, local authorities were told of the money that they would get for the current year. They tell us that they are on track to spend all the funding that the Scottish Government is providing.
I understand from local authorities that the Government has extended the deadline for the expenditure of the money, because it would not be spent by the end of the financial year. Local authorities have been given longer to spend the money. The Government has underspent its budget in the past two years.
You are in your final minute, minister.
Our budget is being spent on energy efficiency measures in the home. We are delivering more energy efficiency measures per head of population in Scotland than are being delivered in the rest of the UK, and we will continue to do that. That is because of the funding that the Scottish Government has provided. It is not just me who is saying that—the energy companies are saying that, local authorities are saying that and the Scottish fuel poverty forum is saying that. [Interruption.] Labour members may laugh, but the reality is that we are consistently delivering more energy efficiency measures per head of population in Scotland than are being delivered in the rest of the UK.
We are spending more money on fuel poverty than the previous Labour Administration spent on it. In our white paper, we have committed to removing the obligation from the energy companies and putting it on the public expense. In that way, we will ensure that energy efficiency measures continue, and consumers in Scotland will experience a year-on-year reduction in their bills. What we propose is not simply a temporary measure of the kind that the Labour Party proposes.
You must close, please.
I will continue my remarks in my closing speech.
I move amendment S4M-09747.2, to leave out from first “notes” to end and insert:
“welcomes the publication of the Scottish Fuel Poverty Forum’s final report on 24 March 2014 and its acknowledgment that the Scottish Government has continued to honour its commitment to eradicate fuel poverty by way of support and funding; notes the latest fuel poverty statistics published in the report, which show that there were 647,000 households in fuel poverty in 2012, a drop of 74,000 households compared with 2011; recognises that the Scottish Government will spend around a quarter of a billion pounds over the three year period, 2013-14 to 2015-16, on fuel poverty and energy efficiency, using its funding to lever in additional investment, reduce carbon emissions and support jobs; further recognises that, since the government came to office in 2007, over 600,000 households have had energy efficiency measures delivered across Scotland, and welcomes the Scottish Government’s proposal in Scotland’s Future: Your Guide to an Independent Scotland to significantly cut energy bills year on year by transferring funding for ECO and Warm Home Discount from energy companies to the Scottish Government thereby ensuring continued funding for fuel poverty and energy efficiency measures designed specifically to meet Scottish circumstances.”
14:58
Fuel poverty impacts to some extent on every household in Scotland. We have already heard that figures suggest that up to 40 per cent of Scotland’s homes are now technically defined as being in fuel poverty. Fuel bills are becoming a larger monthly expense for many more households and are having a bigger impact on the way in which household budgets have to be managed. Therefore, there are many people out there whom we should be concerned about.
When we take part in a debate on fuel poverty, it is irresponsible of us to allow any political party to claim the high ground. The fact is that it has become a priority for us to deal with fuel poverty. People who are suffering from fuel poverty expect politicians to work together more closely to achieve that objective. I will try to work more closely with others in the Parliament but, unfortunately, I will also indulge in the practice of blaming other people for some of the mistakes that got us to where we are today. I will do so because of the great irony that, while it was in government for 13 years, the Labour Party did a great deal to achieve the things that it is complaining about today.
Will the member take an intervention?
No. Let me continue. I can inform the member at great length.
We have heard a great deal about the big six energy suppliers and the fact that the monopoly position that they have almost achieved allows them to manipulate the market somehow. However, it was on Labour’s watch—in fact, it was largely on Ed Miliband’s watch—that the number of major suppliers shrank. The number shrank from 15 in 2000 to a mere six by 2010. In that time, gas bills more than doubled.
We have also seen Labour oppose the competition inquiry, which would do something to fight against the monopoly position that has been achieved by our energy suppliers.
It is a fact that much of what Labour and Ed Miliband have proposed in the past would have meant that energy costs would have been very much higher now than they would otherwise be. Ed Miliband planned to add £193 a year to fuel bills, and he now wants a target for clean electricity by 2030 that would add £125 a year to bills at today’s prices.
Will the member take an intervention?
Oh, go on—very briefly.
On a serious note, I am absolutely committed to working with everybody across the chamber to tackle fuel poverty. It will be interesting to see whether the Government is.
When Ed Miliband was energy secretary, bills fell by £100. Under David Cameron, bills have risen by £300. Will the member comment on that?
I will explain that. The point is very useful to make to the SNP for a completely different reason. During 2008, energy prices peaked, with oil at a value of $140 a barrel. In nine months, the oil price dropped $100 a barrel, to only $40 a barrel. That is why energy prices dropped under Labour. That had nothing to do with—in fact, it was in spite of—the efforts of the great Ed Miliband.
In the time that the Conservatives have been in government at Westminster, we have seen the error of the ways of previous Governments and taken the opportunity to move quickly to simplify tariffs and enable faster switching for those who want to take advantage of the opportunities in the marketplace. In the most recent budget, we reduced green levies and brought in further measures to promote energy efficiency. The competition review that I mentioned earlier will go ahead and ensure that we in this country have a truly competitive system of energy supply, which will result in lower prices for consumers, and there will be sanctions and penalties to ensure that they are properly enforced.
In the same time, we have taken measures to protect winter fuel payments for 12.7 million pensioners across the UK as a whole. We have reinforced cold weather payments, and we are making energy companies support the most vulnerable. New funding for energy-saving improvements in homes will benefit people throughout the country, including Scotland. Reducing our dependence on expensive imported energy sources will also have the effect of cutting energy costs, and tax breaks for companies that are exploring for shale gas can begin the process of taking us into a position that is similar to that which is enjoyed in North America, where energy prices are falling for both industry and domestic consumers.
The member should draw his remarks to a close.
There is so much that we could achieve by working together. Come on: let us work together for the benefit of those who need our help.
I move amendment S4M-09747.1, to leave out from “rising” to end and insert:
“high energy prices and high levels of fuel poverty in Scotland; condemns the unworkable policy of the UK Labour leader, Ed Miliband, to freeze energy prices, which has been roundly criticised by competition experts, consumer groups and independent suppliers and will, instead of tackling the cost of energy, result in price rises before and after the proposed freeze; notes that, since Ed Miliband’s pledge to freeze gas and electricity prices, Scottish and Southern Energy has cut its energy bills, meaning that a freeze would have resulted in Scots paying more in their bills than they do now; notes the efforts by the Labour Party to introduce a decarbonisation target that would have added £125 a year to energy bills; welcomes the UK Government’s moves to reduce green taxes on energy companies so that savings can be passed on to consumers and its efforts to make tariffs simpler and the energy market more competitive; notes that, despite accounting for less than 10% of the population, Scotland now hosts more than 50% of the UK’s onshore wind turbines, and calls on the Scottish Government to review its energy policy, which, through its over-reliance on expensive, unreliable and heavily subsidised onshore wind energy, is a major contributory factor in high domestic energy costs.”
We are very tight for time. Speeches should be up to four minutes, please.
15:03
Fuel poverty is a much more complex issue than the Labour motion suggests. It is a function of energy prices, earnings, quality of housing, climate, access to the gas grid and other complex factors that are far beyond the Labour Party’s level of understanding and, like most of the failings of successive Westminster Governments, far beyond the Scottish Government’s ability to fully mitigate. When Ed Miliband was energy secretary, he failed to fix the roof when the sun was shining. Now that it is raining, the Tories, with their austerity programme, are taking the buckets away from the Scottish Government as well as selling off the slates on the roof.
Energy prices that are rising well beyond the rate of inflation, well beyond increases in earnings and well beyond our ability to insulate are the main factor that is driving fuel poverty. That, in turn, is due to a failure of both the current and the previous UK Governments’ energy policies. Energy prices are elastic, just like the price of apples. When there is a shortage of apples, the price of apples rises. When there is insufficient energy, the price of energy rises.
Will the member take an intervention?
No, thank you. I am short of time.
Ofgem has been issuing stark warnings that the lights will go out soon in England if reserve generation capacity is not urgently increased. That capacity is now approaching 2 per cent when, for safety’s sake, it should be around 25 per cent. On a couple of recent occasions, as much as £30,000 a kilowatt hour has been paid in the short-term energy markets just to keep the lights on. That drives average energy prices upwards.
Ed Miliband’s proposal to cap energy prices was ill-judged and has driven investment away from energy generation, especially renewables investment. The Tory Government’s reaction, in deciding to reduce and ultimately scrap the ECO without having a successor scheme in place was equally unwise and has led to the mothballing of many energy efficiency schemes across Scotland. If that was unwise, the decision to subsidise the Hinkley Point scheme to the tune of £35 billion, at double the wholesale price of energy, was just as bad.
Will Mr MacKenzie give way?
No, thank you. I am short of time.
Further costs are added, with clean-up costs paid by the taxpayer. For example, decommissioning of Sellafield is estimated at £67.5 billion, which is more than £1,000 for every person in the UK. That will ensure that those people who remain in the union will be paying very high energy prices for a long time to come.
Fuel poverty is at the unacceptably high level of 20 per cent across the UK, but it is running at well over 30 per cent across Scotland. The truly shocking point, though, is that it is well over 50 per cent across our islands. One study suggests that it is at 88 per cent in Orkney, but it is also high in Shetland and the Western Isles.
You should draw to a close, please.
Those islands are prevented from realising the opportunities that are offered by renewable energy because of a lack of investment in grid infrastructure by the same UK Government. That does not sound like a union dividend to me; it sounds like a union disaster—
It sounds like the end of your speech.
That is why, increasingly, the people on Scotland’s islands tell me that they will vote yes in September.
15:08
Mike MacKenzie mentioned a number of factors that he said contribute to fuel poverty. He mentioned prices, earnings and the quality of houses. There is no doubt that those are all factors. The minister listed a range of things that the Scottish Government has done, but it is not what the Government has done that is the problem; it is what the Government has not done and the problems that it is creating in constituencies such as mine. Day in and day out, I deal with constituents who are suffering because of fuel poverty and who are having to make the difficult decision that Jackie Baillie mentioned about whether to eat or turn on the heating. There are pensioners who have to seek refuge outside their homes to try to stay warm because their homes are too cold for them to stay in.
We often have to make choices in our everyday lives, and I accept that the Government also has to make choices. I accept that it was the Government’s decision to ensure that the children of MSPs, MPs, lawyers, doctors, bankers and other wealthy people get meals at school for free.
Will the member take an intervention?
Sit down, please.
The choice that the Government has made to spend its money on that means that my constituents who are already living in poor households and who have difficult-to-heat homes have money taken away from them to ensure that the better off in our society are protected. That is a legitimate choice for the Government, but the minister should not shed crocodile tears about not having money to help the poor when she has chosen to help the better off.
Will the member give way?
I will come to Mike MacKenzie in a moment.
The minister has said that the only issue she can deal with is the quality of housing, but what would happen if Scotland separated from the UK? The fact is that the Scottish Government wants to protect the energy companies’ profits and make the taxpayers pay. That is the choice that it is offering people in this country.
The Scottish Government could do something just now about earnings. Indeed, the following Labour Party debate is tied fundamentally to this debate. The question is whether the Government will support the introduction of the living wage across Scotland, or whether it will yet again vote it down. It could, for example, go and persuade its prominent supporters of independence such as Tony Banks—who just this month advertised for care home staff on the minimum wage, not the living wage—that they could do something to ensure that people have the money to keep their houses warm.
There is also more that the Government can do about the quality of housing. I opened a fantastic Hanover (Scotland) Housing Association housing complex in Murray Place in Barrhead, and I recently attended the opening of Link Housing Association houses in Tannahill Crescent in Johnstone. What was striking in both cases was that people were living in warm, easily heated and high-quality houses. However, housing associations and other providers tell me that the Government is not providing the money that they need to build the homes that we require.
So, there is something that the Government can do.
Please draw to a close.
The minister has made choices, but she has turned her back on the poor.
15:12
On one side of the argument, there are the prices that people have to pay for energy; on the other, there are the production costs of electricity. In The Observer’s business section on 30 March, Terry Macalister posed six questions that the British energy industry needed to answer. The crux of his argument about the populist fixation on prices was that
“They”—
that is, the big six energy companies—
“see themselves as an easy media whipping boy and the scapegoat of successive governments’ unwillingness to explain to the public that the need to modernise and decarbonise the energy industry means higher prices whoever runs it. Some of them now see the competition inquiry as a chance to tell their side of the story.”
We think that Labour’s argument is energy illiterate, because it fails to take into account the handling of energy policy by successive Governments. Indeed, when we compare prices for electricity for domestic consumers across Europe, we find that Britain is by no means the most expensive; for example, the prices in Germany, Italy, Norway and Ireland are far higher in terms of euros per kilowatt hour. Why is that the case, and why do we have so many fuel-poor people? In any case, members should be in no doubt that the UK Tory and Liberal Democrat Government is behind the curve in energy policy, and the fig-leaf inquiry into consumer prices hides the starker facts about Britain’s dysfunctional approach to decarbonising power sources and telling consumers the truth.
I recall the body for monitoring progress on reducing greenhouse gas emissions—the UK Committee on Climate Change—warning in December 2012 that green power strategies will eventually prove cheaper than relying on the gas-fired electricity generation favoured by the Chancellor of the Exchequer, George Osborne. The chief executive of the UKCCC, David Kennedy, said:
“It is like taking out an insurance policy—you pay £100 now to avoid having to pay £600 later”,
adding that
“It’s a similar argument to the national debt. It is all about not lumbering our kids with the costs associated with bad decisions we have made.”
Although this Parliament has only some of the required powers, Labour says that there is much that we can do. However, the SNP is saying that we want to have all of the powers so that we can ensure that we solve fuel poverty and do not just complain about the poor being the butt of the problem.
Labour’s pledge to freeze gas and electricity prices until 2017 will not solve the problem. The SNP plans a permanent cut in energy bills, which is unlike the temporary measures that Labour proposes. Labour proposes a temporary price freeze for 20 months, but with the powers of independence we will permanently remove from bills the costs of the warm home discount scheme and the energy companies obligation. That would help hard-pressed consumers year in and year out and help the fuel poor, because we would move the spending on to cheaper renewable energy, which subsequent generations will most certainly benefit from.
Terry Macalister said:
“It is unsustainable to keep loading the cost directly on to consumers through energy bills, as this hits the lowest-paid and most needy.”
However, the taxpayer paid for nuclear, coal, hydro and oil power stations in the past. Terry McAllister also said:
“The taxpayer is the obvious candidate to foot more of the bill, but this requires the government to be more open”
about spending priorities. He was talking about the UK Government, but the Scottish Government is open and is tackling the problem with the powers that we have. However, we need them all to ensure that it is a success.
15:16
As colleagues will be aware, fuel poverty is nowhere higher than in my constituency, with recent estimates from the Orkney Housing Association suggesting that the figure there for fuel poverty might be around 68 per cent as opposed to the national average, which is around half that. I therefore welcome this debate, albeit that it is brief and will not necessarily result in a meeting of minds or a call for collective action.
I accept that Labour’s price-freeze policy has been successful in putting the SNP Government in a spin, with three different responses across three days from three different ministers, but I think that that policy runs the risk of increasing bills, reducing competition, putting at risk vital investment and hurting small suppliers, thereby reinforcing the domination of the big six. The Tory amendment points out all that, fairly, before going on to entirely ruin it all with the customary rant about onshore wind.
As for customary rants, we had the minister’s press release this morning, followed up by Mike MacKenzie’s contribution to this debate, suggesting that it is all the fault of Westminster and that independence will somehow be a magic bullet.
Will the member take an intervention?
No.
As Jackie Baillie pointed out, the minister’s suggestion is utter nonsense, not just in relation to the potential impact on investment in renewables but in relation to the implications for customers’ bills. In addition, the suggestion seems to betray a complete misunderstanding of how ECO works, because it is made up of the affordable warmth programme, which targets £360 million at fuel-poor households; the carbon-saving community obligation, which focuses £190 million on the poorest areas; and the carbon emissions reduction obligation. However, it is only the latter that has been the subject of reductions, and they are being compensated for by £540 million of extra public spending on household energy efficiency incentives. There is also £450 million to help improve energy efficiency in the private rented sector; colleagues across the chamber have pointed out that that has been lacking to date. There has not been an attack on the fuel poor as portrayed by the minister; on the contrary, a package of changes to energy policies has enabled £50 to be taken off average household energy bills.
There are legitimate concerns about the operation of the energy market, which is why it is welcome that Ofgem has referred the market to the Competition and Markets Authority, which follows the energy market assessment announced by Ed Davey last year. There will be tough action based on a detailed, independent, expert assessment of the state of competition in the UK energy market. There are other measures, too, such as £146 million of cold weather payments; winter fuel payments to over 1 million households; making energy bills simpler, clearer and fairer; and encouraging collective switching schemes whereby households club together to secure better deals—so far, 21,000 homes have benefited through that by an average of £131.
I would agree that all that is certainly not enough, but it is far from the picture that was painted by the minister and some of her back-bench colleagues, and it is a more robust and sustainable response to justified public concerns about fuel costs than a counterproductive price freeze would be.
I believe that successive Governments—north and south of the border—of all political hues have prioritised the fight against fuel poverty, but despite that, the number of households affected, not least in my constituency, has never been higher. That is not acceptable, but the issue will not be addressed by either scapegoating or gimmicks. I urge Parliament, despite the impending entertainment of September, to gather together in common cause to address a problem that we all accept is out of control and needs to be tackled urgently.
15:20
First, it is a scandal that we are having to discuss fuel poverty in energy-rich Scotland. That in itself clearly shows the failures of the current system, which Westminster Governments, past and present, have presided over.
I was filled with some dread when I read Jackie Baillie’s motion, because it mentions reform of the energy market. Why does that fill me with dread? As has been pointed out, in 2000 there were three generating companies and 14 energy suppliers in the UK. After the last set of Labour reforms, we were left with the big six, which we have all been moaning about to one degree or another in the debate. The big six have on their boards many former Labour parliamentarians—including ones from this place—so somebody did all right out of the last set of reforms, although the public certainly did not benefit from Ed Miliband’s reforms. [Interruption.] I cannot hear what Ms Baillie is shouting at me—she may want to intervene.
I seem to recall that there are a number of SNP former or current employees of some of the big six. Does Kevin Stewart deny that?
I am talking about members of the board, who direct policy—the folk with real influence—who moved from Parliament on to the boards of the big six after Labour’s last reforms.
Let us look at some of the issues that we face. There has been a lot of talk about price rises, but let us look at the fact that incomes—particularly those of the very poor and very vulnerable in our society—have been slashed across the country as a result of welfare reforms that have emanated from that place in Westminster. Those are the tragic things that are happening day to day. As has been pointed out, rightly, folks are going to food banks and saying to the volunteers, “We cannot heat our food, as we have no energy at home because we have been cut off.” That is the true scandal that we have to face, and we require to have all the powers in this Parliament to deal with it.
Let us look at another fact. Third Force News stated on 28 March that in Scotland £36.58 per electricity customer is invested in energy efficiency, compared with only £3.52 in England. That shows that the Scottish Government is doing what it can with the powers that we have. What we require is all the powers to tackle not only fuel poverty but welfare reform and a ton of other issues that we need to deal with.
15:23
I start by congratulating the Labour Party on selecting the subject of fuel poverty for debate this afternoon. I welcome the opportunity to highlight what is a growing problem for many of my constituents and people across Scotland, even though I might differ from Labour in the solutions that we might propose.
Jackie Baillie was right to highlight the statistics on the rising problem of fuel poverty and the irony of the Scottish Government’s target to eradicate it by 2016. That is only two years down the track, yet we are nowhere near meeting that target. So far, Ms Baillie and I are in agreement. However, in the remainder of my remarks—I have only three minutes—I want to concentrate on energy prices.
The UK Labour leader, Mr Miliband, has proposed a freeze of gas and electricity prices until 2017. I do not often find myself in agreement with Fergus Ewing in the Scottish Government on energy issues, but this is one issue on which he and I are in absolute accord. The announcement from Mr Miliband is utter nonsense that would deter investment in the development of new energy sources and in any event would be easily circumvented by price rises prior to any general election in which the market felt that the prospect of Mr Miliband being successful, however dreadful that might be, was a realistic one. Indeed, the pledge already looks to have been overtaken by events, because one of the big six, SSE, based in Perth, has agreed its own price freeze, and I am sure that other suppliers will do so too. I accept that there are issues with competition in the energy market, which is why the recent Ofgem recommendation for a Competition and Markets Authority inquiry seems to me to be the right way forward.
We cannot ignore the elephant in the room, which is the high cost of low-carbon energy, as Rob Gibson quite fairly acknowledged, and that is exactly the type of energy that Ed Miliband was so enthusiastic about when he was the Secretary of State for Energy and Climate Change in the UK Government. At the time, he was happy to see bills rise to pay for low-carbon energy; to now take a different view and complain about those very price rises reeks of opportunism and hypocrisy.
SNP ministers come to this chamber week after week to denounce the high cost of new nuclear power and they state quite rightly that it is double the market price for today’s electricity. What they fail to mention is that the renewable energy that they and their back benchers are so fond of and so addicted to is even more expensive than new nuclear power. Even the most mature renewables technology, onshore wind, is today coming in more expensive than the contracts signed for the new nuclear power station at Hinkley Point, which Mike MacKenzie rails against.
The strike prices are only part of the picture, because unlike nuclear power, which is a source of reliable baseload, wind power provides an intermittent, unreliable and unpredictable source of power that requires backup at all times from conventional generation.
It is time for you to close, I am afraid.
It also requires substantial grid upgrades, all of which have to be paid for by the poor consumer.
It is no wonder that we have got fuel poverty. Mr Miliband is going around telling us that, if Labour wins the election, we will have to embrace wind turbines. More wind turbines mean more fuel poverty.
15:27
Our target to eradicate fuel poverty now seems like a fantasy. The Scottish Government has consistently cut fuel poverty funding and underspends that even smaller budget. It has shown no commitment to tackling fuel poverty, and that is all the more inexplicable when fuel poverty is on the increase due to the higher costs of fuel and the decreases in wages throughout our community.
In the UK, we have the worst fuel poverty record in western Europe, at 19.2 per cent, and that figure rises to 27 per cent in Scotland. However, those figures pale into insignificance when compared with a recent interim report on fuel poverty in the Western Isles, drawn up by the Energy Advisory Service, which shows that a staggering 71 per cent of homes suffer from fuel poverty in the islands. A total of 2,167 households responded to the survey. Eighteen per cent of them were in severe fuel poverty, spending more than 20 per cent of their income on fuel, and 11 per cent were in extreme fuel poverty, spending 30 per cent of their income on fuel.
The Scottish Government needs to take action. Warm words do not heat homes. Time and again over the winter months and throughout the year, constituents from the Western Isles, Skye and other rural areas have contacted me telling me that they are struggling to heat their homes. They are forced to make the choice between heating and eating. As they are off the gas grid, they cannot take advantage of the many schemes that are available.
The figures for the Western Isles and beyond cannot be ignored. I believe that they will also be representative of many other areas in the Highlands and Islands that are off the gas grid and suffer the same problems. It means that people do not have access to the cheapest form of fuel and that they must obtain heat from oil, electricity or solid fuel, which are all much more expensive.
The only way to tackle fuel poverty in those areas is by insulating homes to ensure that less fuel is used, which is a key recommendation of the Energy Advisory Service interim report. Because they are off the gas grid, many households do not qualify for the energy companies’ schemes, neither do those houses have a value that allows the occupants to borrow to install insulation, even if they could afford it. They do not qualify for the green deal either, because the costs and savings just do not add up.
One-and-a-half-storey stone-built homes are also hard to treat; they basically need to be clad from top to bottom, which is expensive. However, there could be economies of scale. The Scottish Government needs to introduce a concerted programme for insulation throughout rural Scotland, starting in our islands. With those rates of fuel poverty, a blanket approach can be justified, as the vast majority of people are suffering from fuel poverty there. That is the only way to tackle rural fuel poverty, so I urge the Government to reinstate its budgets and use its underspend to start the process.
15:30
The Scottish Government has maintained investment in energy efficiency programmes despite financial pressures and limited powers. Indeed, it intends to spend around a quarter of a billion pounds between 2013 and 2016 to deal with fuel poverty and energy efficiency. However, as others have said, we must do more if we are to honour our historic commitment to eradicate fuel poverty by 2016.
As the member for Skye, Lochaber and Badenoch, I know only too well the effects of fuel poverty. The rural nature of the Highlands and Islands means that we are at the highest risk of fuel poverty. Indeed, we have been suffering in that regard for some considerable time.
The latest figures show that Skye has one of the highest proportions of severe and extreme fuel poverty in Scotland, with at least 50 per cent of the population living in fuel poverty. Previous figures have shown that pensioners in the islands and on the west coast are the most badly affected. As Rhoda Grant said, fuel poverty now affects almost three times as many west Highlanders than people elsewhere in the country. As if that were not disastrous enough, that has resulted in an eat or heat dilemma for many and is creating an additional need for more food banks.
According to the recent briefing on fuel poverty by Energy Action Scotland, rural consumers are being hit by the dual problem of having the most energy inefficient homes and the most expensive energy. It highlighted that very remote areas of Scotland are not well served by current programmes that are aimed at reducing fuel poverty and improving energy efficiency.
Energy Action Scotland advises that remote, rural and off-gas grid areas need to be better served by the main programmes, and that there should be, in particular, supported measures for hard-to-treat homes and houses using liquefied petroleum gas and oil, which are currently not covered because the energy companies will not include replacement LPG and oil boilers in their ECO schemes. That is discrimination that should end forthwith. The power to ensure that it does so lies with the UK Government. At least the SNP Government has begun to tackle the problem, by providing specific funding to be used to deliver heating and insulation improvements for low income and vulnerable households in off-gas grid properties. My constituents welcome that.
For an energy-rich country such as Scotland and its renewable-energy-rich north to have so many of its people living in fuel poverty is an absolute scandal that will not be allowed to happen after independence. No longer will Scotland need to wait to see what hand it gets dealt from Westminster. With full control, we will be able to direct policy towards eradicating the scourge of poverty and all the ills that deprivation entails.
I call Alex Johnstone. You have up to four minutes.
15:33
I am sorry; I did not realise that it was me next. I am behind the times here. [Laughter.]
We have had an interesting debate, but it has, unfortunately, not shed much light on what we want to achieve.
We have all said that we want fuel poverty to be eradicated and that we want to work together to ensure that we make some progress on that. However, as members have spoken, we have heard the same lines that we have heard time and again. We have heard the SNP consistently argue for policies that would inevitably push up the cost of energy on a domestic basis and more broadly. SNP members’ answer to those who point that out is simply to blame Westminster. That has been the SNP’s policy for a long time, so there are no surprises there.
We heard Rob Gibson talk about the need to make decisions today that will serve us in the long term. However, with that, he made the admission—perhaps the honest admission—that renewables are a high-cost solution and that going for renewables today will simply add to fuel poverty rather than giving us a route by which we can remove fuel poverty. The problem is that onshore wind power is a high-cost option. As we heard in some detail from my colleague Murdo Fraser, the fact is that, if we choose to go for onshore wind, we must accept that energy costs will be high. Liam McArthur noted that our amendment contains what he described as our customary rant against onshore wind. Well, onshore wind is expensive. If we do not want to promote a continued rise in fuel poverty, we must address that problem.
As Kevin Stewart and others said, Scotland is an energy-rich nation but that energy comes at a high cost. The future of an independent Scotland—should it ever happen—will be dependent to some extent on the high cost or high value of the energy that we produce. In fact, the promises that are made week in, week out about what can be achieved with the money that could be drawn out of Scotland’s energy resources belie the fact that, occasionally, we have debates such as this one, in which the same SNP members stand up and complain about the cost of energy. The two things do not go together; we cannot have both.
With the profits—the taxation raised—from Scotland’s energy, we can ensure that we eradicate not only fuel poverty but poverty as a whole. Does Mr Johnstone not think that that would be a good thing?
Let us take a shallow line on that. Most of the tax that is raised in the North Sea is enhanced corporation tax. Mr Stewart’s Government proposes to slash corporation tax. Let us address that some other time.
The truth is that energy costs and fuel poverty are rising and decisions about how we produce our energy in future are being deferred. Low-cost solutions must be our preferred option.
The political parties in Scotland need to get together and address the cost of the energy that we supply. Options exist in Scotland to pursue a lower-cost approach. We must work together across the political parties in the Parliament to pursue those low-cost options, not ignore them in the pursuit of some other green priority and at the expense of the poorest in society who cannot afford to heat their homes.
We cannot have both options; we cannot have it both ways. We must choose, so let us choose constructively.
15:37
One thing on which we all agree is the fact that, in a country as energy rich as Scotland, as Kevin Stewart said, having so many people in fuel poverty is a disgrace.
I will tackle some of the points that were raised during the debate. I will start with the points that Hugh Henry made.
During his speech, Hugh Henry clearly reiterated the point that, despite supporting the Scottish Government’s budget, the Labour Party is opposed to free school meals in spite of all the arguments and support for the policy. He also talked about choices. The Scottish Government has made a choice to increase what it spends on fuel poverty, which is more than the previous Labour Administration did. We have also made a commitment in the white paper that we would increase the minimum wage and benefits in line with inflation so that we would not have the gap between the rich and the poor about which he talked. We have made choices to help the poorest in our society. That is important.
Hugh Henry also mentioned that we are saying what we have done, not what we are doing. In my opening speech, I said that I was pleased to outline what the Scottish Government had done, was doing and would continue to do within the powers that it has to eradicate fuel poverty in Scotland. Members should make no mistake about the fact that we are committed to eradicating fuel poverty. [Interruption.] We have spent the budget. I hear Jackie Baillie sniping on the sidelines that we have not spent the budget. I will say a couple of things about that.
The first that the Scottish Government knew about the changes to ECO was in December. We quickly adapted our home energy efficiency scheme for Scotland to give flexibility to the local authorities to take account of that. That was important because it kept jobs in the insulation industry in Scotland and allowed the local authorities to proceed with the schemes that they had set up.
Jackie Baillie also mentioned changing the definition of fuel poverty. We have no intention of changing that definition, as has been done in the rest of the UK.
The report from the minister’s own Scottish fuel poverty forum discusses research that the Government is undertaking to change the definition. Is the minister now clearly saying that there will be no change at all to the definition?
What I am saying, and what we said the last time, is that the Scottish Government has no plans to change the definition of fuel poverty. If the fuel poverty forum came up with proposals on that, we would look at them, but I am not aware that the forum is doing that.
It is in the report.
The Scottish Government has no plans to change the definition of fuel poverty and that is simply the end of it—we have no plans to do that.
What we have done—this is important—is get 10 times as many measures in Scotland. That was mentioned by someone else—we have 10 times as many measures in Scotland as there are in the rest of the UK.
Ten times more fuel poverty.
Ten times more fuel poverty.
We are outperforming the rest of the UK in terms of what we are doing by way of energy efficiency measures.
Sedentary interventions are no more welcome than they ever were, Dr Simpson.
The Opposition does not want to hear this. Members do not want to hear what the Scottish Government is doing to help with fuel poverty and to help people in their homes. We are managing to deliver HEEPS despite the proposed changes to ECO. Members should make no mistake about this. I think that it was Liam McArthur who was speaking about this. The UK Government has said that £500 million less will be spent on energy efficiency measures because of the proposed changes to ECO. That is £50 million in Scotland, and that will have a knock-on effect on what we are doing here.
We are helping those who are most in need in our communities. We have already supported more than 600,000 households to install energy efficiency measures since 2007. That is one in four households, and that cannot be pooh-poohed by the Opposition.
I will say this again, as have other members: we only have powers over energy efficiency; we do not have powers over our economy. There is a limit to what we can do. We made a commitment in “Scotland’s Future” that we will significantly cut energy bills year on year, while maintaining expenditure on energy efficiency. There is no commitment from the Labour Party on that. The Labour Party has proposed a temporary freeze on energy companies’ bills, but it has made no commitment to spend money on energy efficiency measures.
Let us not forget: when the Labour Party was last in power in the UK in 2010, it consistently spent less on energy efficiency measures year on year. That has to be said. The Labour Party proposes to freeze energy prices in the short term, but we are proposing a year-on-year reduction in people’s fuel bills. That is important. It has to be consistent—the bills have to be reduced year on year. I can see members in the Opposition parties laughing at that, but that is the reality of it. We have made that real commitment year on year, and we will continue to do so.
Will the member take an intervention?
The minister is in the last minute of her speech.
As has been said by a number of members on this side of the chamber, without all the powers relating to the factors that contribute to fuel poverty, we cannot do as much as we want to do. We want to eradicate fuel poverty. There should not be fuel poverty in a country as energy rich as Scotland. We are committed to eradicating fuel poverty and we will do everything within our existing powers to do that, although we could do a lot more with the full powers of independence.
15:43
More than half of single pensioners in Scotland are in fuel poverty. The elderly, single adults and those in rural communities are most affected by the scandal that is fuel poverty. That is why Scottish Labour has secured this debate. Scottish Labour wants an energy market that works for the people, not the energy companies and their shareholders, many of which are overseas companies. As a result of the dominance of the big six, we have price increases far beyond inflation, which has partly resulted in the scandal of fuel poverty that we have today.
As we have heard during the debate, we are not immune from the bickering and rhetoric that we have come to know so well during the on-going constitutional debate. The SNP mantra of “It’s not our fault. It’s Westminster’s” is being wheeled out once again.
No matter the result of the referendum in September, fuel poverty will not disappear overnight. It needs a party that is committed to making a difference, and that is both Scottish and UK Labour. We will freeze prices while we reform the energy market, while the SNP members sit on their hands, and their MPs—along with the Tories—vote against such Labour proposals.
Jackie Baillie rightly highlighted in her opening remarks that a staggering 40 per cent of households in Scotland—almost 900,000 people—are fuel poor. The minister rhymed off figures and facts and told the chamber about meetings held and visits made. She might have spent a bit more time reading her own report, as in chapter 2, on pages 7, 8 and 9, it proposes to change the definition of fuel poverty, as detailed in paragraph 2.1.
As for the Scottish Conservative amendment, Alex Johnstone clearly has it in for Ed Miliband—I do not know why—and for our pledge to freeze energy bills from 2017. He calls the pledge “unworkable”, despite the fact that SSE has already introduced a freeze. It is clear that, on energy prices, the Tories and the SNP—or at least Alex Johnstone and Fergus Ewing—are on the same page.
Although Scotland has the fourth highest household income of any of the 12 UK regions, we have the highest rates of fuel poverty. However, it is not solely prices that lead to fuel poverty; there are major issues surrounding energy efficiency. We need to ensure that any programme is fully monitored and evaluated to ensure that the money was worth spending, otherwise we could throw away millions of pounds and make little or no difference to the painful choices that families, the elderly and those in rural communities have to face. An underlying issue that must be addressed is that people do not know what programmes they can apply for.
Energy Action Scotland has five key asks, which include the public reporting of the main Scottish programmes if progress is to be recorded and lessons are to be learned, and improvements in the remote, rural and off-grid areas and their access to the Scottish Government’s programmes.
Will the member take an intervention?
No—I have a lot to get through, so I will carry on. If I have time later, I will let the member in.
Rhoda Grant rightly raised the issue of rural fuel poverty, which is worse than urban fuel poverty, as was highlighted in the recent debate on renewable heat. We need to find ways in which people in rural and isolated groups of houses can work together to develop community energy schemes that use biomass boilers and a local supply of woodchip. Grant funding must be available where it is required, and the link between fuel poverty and climate change must be strengthened if we are to achieve our reduction targets.
It was the first Labour-led Scottish Executive that set out a legislative requirement—in the Housing (Scotland) Act 2001—to establish the fuel poverty target in order to
“eradicate fuel poverty as far as is reasonably practicable by 2016”.
At present, the SNP Government is unlikely to reach that target. Energy Action Scotland estimates that—as I said earlier—there are almost 900,000 households currently in fuel poverty.
Again, Labour has called for an energy price freeze that would save families on average £120 per year, yet the SNP’s own MPs have not voted for it. We are committed to helping the hard-pressed families in Scotland while the SNP is too busy aligning itself with Tories and big energy companies—[Interruption.]
The draft budget that was produced in September last year showed that the Scottish Government had an underspend of £10 million in the demand-led home energy efficiency programme. If the underspend is a result of eradicating fuel poverty and meeting the legislative requirement, we could all agree that it is a good thing. However, we know that the demand and the need for energy efficiency measures still exist, so the scheme is either not working or is not being administered properly.
Tomorrow, we will debate the new Housing (Scotland) Bill at stage 1. However, the key aspect of energy efficiency in the private rented sector is missing from the bill, and I am disappointed that the minister did not make more mention in her opening and closing remarks of the actions that she could be taking in that regard.
The private rented sector houses many of Scotland’s fuel poor, and landlords are under no obligation to bring their properties up to the standard that we expect of social housing. I understand that the Government has set up a working group to bring in new legislation, but 2018 is a long time for people to wait to ensure that their rented house is adequately heated.
Fuel poverty is a societal injustice; it is a dangerous and deadly trend. That is why a Scottish Labour Government here in Holyrood and a UK Labour Government in Westminster will commit to finding a solution through energy efficiency measures, by working to improve the quality of energy measures and accommodation in the private rented sector and working alongside local authorities, fuel providers, housing associations and installers to support local area-based schemes, ensuring that the process is better streamlined to quickly deliver projects on the ground.
By failing to tackle the issue of fuel poverty, the Scottish Government has failed in its duty to help those most vulnerable. That is why we must work together to end fuel poverty and ensure that people no longer have to choose between heating and eating.
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