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Chamber and committees

Meeting of the Parliament

Meeting date: Thursday, September 29, 2022


Portfolio Question Time

Net Zero, Energy and Transport

The Deputy Presiding Officer (Annabelle Ewing)

Good afternoon. The next item of business is portfolio question time, and the portfolio is net zero, energy and transport. If a member wishes to ask a supplementary question, they should please press their request-to-speak button or enter the letter R in the chat function during the relevant question.

Aberdeen City Council (Net Zero Ambitions)

To ask the Scottish Government how it is supporting Aberdeen City Council to meet its net zero ambitions. (S6O-01396)

The Cabinet Secretary for Net Zero, Energy and Transport (Michael Matheson)

The Scottish Government continues to work closely with local authorities to tackle the global climate emergency, including through the Scottish Cities Alliance.

We are supporting Aberdeen City Council in a number of ways. As a full partner in the Aberdeen city region deal, we are contributing £125 million over 10 years, alongside an additional £254 million, which will help to ensure economic transformation for the north-east with inclusive growth, increased wellbeing and a just transition to net zero.

This month, we announced that our north-east and Moray just transition fund will provide £20 million to projects this year, representing a total value of more than £50 million over four years, to support a fair transition to net zero and to diversify the regional economy in Aberdeen, Aberdeenshire and Moray.

We are also supporting a low-carbon infrastructure green growth accelerator pathfinder project in Aberdeen. Alongside that, we are providing some £75 million through the energy transition fund to support our energy sector and the north-east over the next five years to make progress on energy transition as we move towards a net zero society by 2045.

Jackie Dunbar

I thank the cabinet secretary for his answer. Aberdeen City Council has an ambitious plan, with the ultimate aim of becoming a net zero and climate resilient council. The six key strands of the plan focus on mobility, buildings and heat, the circular economy, energy supply, the natural environment and empowerment.

Will the cabinet secretary join me in welcoming that ambitious plan for Aberdeen? Can he go into further detail on how communities in my Aberdeen Donside constituency will be able to take action to help to reach the net zero goal through the community empowerment legislation?

Michael Matheson

I very much welcome the work that Aberdeen City Council is taking forward through its climate change plan, and the work of other local authorities across the country. As a country, we have a target of achieving net zero by 2045, and all parts of the public and private sectors need to play their part in ensuring that we achieve that.

Alongside supporting local authorities to create greater community empowerment, we introduced the Community Empowerment (Scotland) Act 2015 to support communities to take more control over the decisions that affect them, their economies, their wellbeing and their local environments.

This year, we have supplemented that work with £1 million through the just transition fund that will be allocated through the participatory budgeting programme in Aberdeen city, Aberdeenshire and Moray, with the aim of empowering local communities to have a direct say in how funding will be spent on projects that lead to a just transition to net zero.

I will take a supplementary question from Colin Smyth as the Labour spokesperson.

Colin Smyth (South Scotland) (Lab)

Thank you, Presiding Officer. Transport remains the biggest emitter of greenhouse gases and one of the biggest barriers to councils delivering net zero. The Scottish National Party promised in its manifesto to remove the majority of fossil fuel buses from Scotland by 2023—a promise that was repeated in last year’s programme for government. However, Transform Scotland’s research suggests that just 16 per cent of the fleet will be electric or hydrogen powered by the end of next year. Can the cabinet secretary tell us whether that figure is correct? If the target is not met in 2023, when will the Government meet it?

Michael Matheson

We are taking forward a range of work to ensure that we decarbonise our bus network. The member will be aware of the significant levels of investment that the Scottish Government has already made in electrification of the bus network.

One of the aspects in Aberdeen city is hydrogen buses, which we have been supporting. The city has the biggest hydrogen bus network in Europe, I believe, as a result of the investment and support that have been provided by the Scottish Government. That is why, working with Aberdeen City Council and other partners, we have been making sure that we continue the decarbonisation of the bus network.

Liam Kerr (North East Scotland) (Con)

The cabinet secretary mentioned the just transition fund. There are about 120 applicants for the first £20 million of that fund, and they are desperate to get going and start making investment decisions. We know that the Scottish Government selected the successful bidders several weeks ago but has failed to announce them. Constituents have suggested to me that the announcement has been delayed until the SNP conference. Will the cabinet secretary counter those suggestions by publishing the successful names now?

Michael Matheson

I am sure that Liam Kerr will welcome the Scottish Government’s commitment to taking forward the just transition fund for the north-east and Moray. We have identified the successful projects, as a result of the criteria that were applied in assessing the projects, and details will be announced soon by the Minister for Just Transition, Employment and Fair Work, Richard Lochhead.

I gently point out to Liam Kerr that the just transition fund for the north-east and Moray is a £500 million programme over the next 10 years, and we have repeatedly called on the United Kingdom Government to match that, but it has failed to do so. If the member is so keen on more money going into the north-east and Moray, he might want to try to get his colleagues at Westminster to step up and match the Scottish Government’s level of ambition for that area.

Concessionary Travel (Budget)

To ask the Scottish Government what assessment it has made of the impact of its announced £37.6 million reduction in the budget for concessionary travel. (S6O-01397)

The Minister for Transport (Jenny Gilruth)

As part of our routine management of the funding for bus services, the Scottish Government continually monitors forecasted spend against budget. As a result of the demand-led nature of the concessionary travel schemes, we have reduced our forecast for the rest of this financial year, due to patronage being lower than expected.

The change in the forecast will have no impact on access to the schemes for older and disabled persons or young persons. If patronage were to rise above the forecasted levels, so would our expenditure on the schemes.

Foysol Choudhury

In its justification for the cuts to concessionary travel, the Scottish Government cited

“Forecast reduction in patronage numbers and fare levels.”

Given Scotland’s commitments to net zero, would it not make more sense to address the reduction in numbers instead of using that to justify cuts? Is that not another false economy from the Scottish Government?

Jenny Gilruth

It is worth pointing out that there has been a reduction in patronage because of Covid impacts. A return to normal has been slower than expected, and that has been reflected in reforecasting.

Similarly, travel levels under the older and disabled persons scheme remain about 30 per cent lower than 2019 levels, and we know that bus patronage has been slower than other modes of public transport to return to pre-pandemic levels.

However, I recognise what Foysol Choudhury has said. We provide support to the sector more generally. Earlier in the year, I extended the network support grant plus scheme, which existed during Covid, into next month. Next week, I will reconvene the bus task force directly with the sector. Over the summer recess, I met smaller and larger operators to talk about some of the very real challenges that they face.

On the member’s point about pulling people back to public transport, he might be aware that, only two weeks ago, we launched the marketing campaign for the young person’s bus scheme, which has been really successful; we are now over the halfway mark, which is hugely important. We will continue to encourage people to return to public transport, because that is vital for our recovery from the pandemic and, as the member mentioned, for our net zero ambitions and aspirations.

Paul McLennan (East Lothian) (SNP)

More than 2.3 million people in Scotland—everyone under 22, everyone over 60, and disabled people and carers—can now benefit from free bus travel for work, education and leisure opportunities. That policy has been taken forward against a backdrop of the Scottish budget being cut by 5.2 per cent.

Does the minister agree that, if Labour would rather that the Scottish Government did not have to make tough decisions, it is time that it joined the Scottish National Party and the Scottish Green Party in calling for the Parliament to have the full range of levers to realise its aspirations, rather than remain at the mercy of a United Kingdom Government?

Jenny Gilruth

I agree with the sentiment of Paul McLennan’s question. We know of some of the challenges that the Government has faced, particularly over the past week, and we will look at potential future support. That will be informed by the Scottish Government’s emergency budget review. However, it is important that any additional support that we are able to give continues to adapt and evolve so that it remains fit for purpose. That is why I was keen to reconvene the bus task force—I want to speak to the sector directly to ensure that funding and support is fit for purpose as we go forward. However, we must recognise the limitations in the Government’s powers when it comes to revenue, and I hope that that will be reflected in the sentiments from members of other parties—from whom, I am sure, we are about to hear.

Mark Ruskell (Mid Scotland and Fife) (Green)

Free bus travel for under-22s was launched during the Covid crisis, so the fact that there have been 22 million journeys since then is pretty remarkable. I know from discussions with bus companies that those journeys have really helped to build back services after the pandemic.

However, there is still reluctance among over-60s to come back to public transport after Covid, which can affect the viability of some services. How can the message be sent out that bus travel in Scotland is both safe and free for millions of people who are eligible at both ends of the concessionary scheme?

Jenny Gilruth

The member is right to point out the reticence among certain groups in society to return to public transport, which I alluded to in my response to Mr Choudhury.

The Scottish Government continues to invest £300 million annually to give free bus travel to more than 2 million people in this country, including children and young people under 22, disabled people and everyone over 60.

In line with our long-term goal to encourage a modal shift and get people out of their cars and back into sustainable modes of transport such as buses, we will, as I mentioned in response to previous questions, continue to engage with operators, delivery partners and other key stakeholders to promote public transport as an attractive way to travel, as more people begin to return to the workplace and travel more often for leisure purposes.

Graham Simpson (Central Scotland) (Con)

The concessionary travel budget is not the only source of funding that bus operators are set to lose. The network support grant plus scheme is due to end in 10 days’ time. If that happens, routes will go, fares will rise and the frequency of services will drop. England’s bus recovery grant has been extended to April, so will the minister commit to doing the same here?

Jenny Gilruth

The member raised the matter with me prior to the summer recess, and he knows that I extended the NSG plus scheme at the time.

It is really important, though, that Government support adapts to the current context. We have heard from other members today about some of the financial challenges that the Government faces. We budgeted £93.5 million from April this year to support the bus network as we recover from the pandemic, and an additional £20.5 million of funding has been given to extend the recovery until October, as the member mentioned. That is in addition to about £210 million that we provided during the pandemic to ensure that operators were well positioned and at the forefront of our green recovery.

The member talked about the challenges faced by the sector. It is worth mentioning a number of other challenges that do not come under my responsibilities as a minister in this Parliament. As a result of Brexit, there are labour challenges, which I have discussed with the sector. There are also challenges in relation to fuel costs. Again, this Parliament can take limited actions in that regard.

Many of those matters are reserved to the United Kingdom Government. The member might be interested to know that I have invited the UK Government to take part in the reconvened bus task force next week. I very much hope that it will take part, noting the reserved competence, as neither the member nor I have responsibility for those matters.

Question 3 was not lodged.

Standing Charges (Highlands and Islands)

To ask the Scottish Government whether it has had discussions with the Office of Gas and Electricity Markets regarding reported higher standing charges for energy in the Highlands and Islands. (S6O-01399)

The Cabinet Secretary for Net Zero, Energy and Transport (Michael Matheson)

The increase in energy prices in recent months remains a huge worry for many consumers. That is especially true for those in the Highlands and Islands, where the additional costs of distributing energy are higher than in other parts of the country.

The structure of customers’ energy bills, including standing charge levels, is reserved to the United Kingdom Government. Although that means that we have no option to intervene directly, we continue to provide consumers with as much support and advice as we can. We are also raising specific issues of concern with the UK Government and Ofgem.

Emma Roddick

It is clear from that, and from so many other penalties that the Highlands and Islands face for being a net exporter of clean green energy, that the UK Government will never work for the communities that I represent and that it will instead leave them to suffer extreme fuel poverty. Does the cabinet secretary agree that we could and should do much better in Scotland and that we should call for energy policy to be devolved?

Michael Matheson

I acknowledge the specific concerns that the member’s constituents have and the higher costs that people in remote and rural areas and the islands face in meeting energy charges. To some extent, the existing mechanism penalises individuals who live in those areas as a result of the way in which Ofgem and the UK Government regulate the process.

Where we have scope to take action, we are doing so. For example, through our area-based schemes, we provide funding to deliver energy efficiency improvements in areas with the highest levels of fuel poverty. We have committed to continuing to spend more per head of population in our remote and rural areas because of the significantly higher levels of fuel poverty there and the additional costs that are associated with the work that is necessary.

The member has hit the nail on the head. Given the absolute shambles that we have had with the UK Government’s management of energy policy over an extended period, there is no doubt in my mind that an independent Scotland would be able to manage our energy policy in a much more effective way that reflects the needs of constituents in areas such as the Highlands.

Liam McArthur (Orkney Islands) (LD)

As Emma Roddick has suggested and as the cabinet secretary acknowledged, standing charges have been a particular issue of late. The lifting of the cap in April resulted in a 1p per day increase for gas but a doubling to 45p per day for electricity. Does the cabinet secretary agree that, in the justification for that rise, there has been a suggestion that that is to pay back the moneys lost from companies going bust over the past couple of years, many of which could not be used by customers in the Highlands and Islands because of the total heat with total control mechanism? Will he agree to engage directly with Di Alexander, who is the chairman of the Highlands and Islands housing associations affordable warmth group, on the representations that can legitimately be made to Ofgem and UK ministers about the inherent unfairness in how those standing charges have been structured?

Michael Matheson

On Liam McArthur’s final question, if Mr Alexander wants to write to me about his proposals, I would be more than happy to share that with my officials and as part of our representations to the UK Government on the matter.

There is no doubt in my mind about the impact, which the member rightly highlights, that standing charges have on people who live in our remote and rural communities and on our island communities such as Orkney. That is why the system must be reformed. It is presently calibrated in such a way that it penalises people who live in our remote and rural communities.

The member asked if some of the costs are associated with market failure. The companies whose energy purchasing was unhedged have gone bust. As a result of that, the taxpayer has to pick up the tab. That happened because the UK Government’s regulator allowed unhedged companies to operate in the market. That should never have been allowed in the first place. The blame for the billions of pounds that consumers throughout the country will now have to pay back as a result falls squarely at the UK Government’s door for its failure to regulate the energy markets properly on behalf of consumers.

Question 5 was not lodged.

Peatland Restoration

To ask the Scottish Government whether it will provide an update on its peatland restoration plans. (S6O-01401)

The Minister for Environment and Land Reform (Màiri McAllan)

In recognition of the huge importance of our peatlands in the fight against the climate and nature crises, in 2020, we set out ambitious plans to invest more than £250 million over a decade to restore at least 250,000 hectares of degraded peat by 2030. We publish updates on progress against those targets in our annual climate change plan monitoring reports. The latest of those, which was published on 26 May 2022, is available on the Scottish Government’s website.

Rachael Hamilton

Restoring peatlands will, as the minister said,

“help us fight climate change, support biodiversity and provide good, green jobs ... in rural communities.”

Those words are lifted straight from the Scottish Government’s website.

I will also repeat what the minister said. On page 70 of the Scottish National Party’s 2021 manifesto, there is a promise to restore

“250,000 hectares of ... peatland by 2030.”

However, the Government is failing dramatically and falling short of those targets. Instead, it is almost halving its £22 million commitment to peatland restoration. To meet its targets, the Government will need to restore on average 31,250 hectares of peatland per year until 2030. How does it intend to do that?

Màiri McAllan

I might have thought that the fact that nearly 60,000 hectares of peatland, which was once degraded and emitting carbon, is now restored and sequestering carbon would be a good thing and would be welcomed even by the Tories.

I acknowledge that peatland science is in its infancy, as is the peatland industry. That is exactly why the Scottish Government is doing everything that we can to support the industry by providing that £250 million of funding over 10 years, and that is why peatland action—this is part of NatureScot, our nature agency—has been working to support restoration projects throughout the country since 2012.

The industry is in its infancy; it is only a few years old. Contractor capacity is limited, as is the number of technical advisers. However, the Scottish Government is working at pace to bridge the gap and to meet our ambitious targets.

Fiona Hyslop (Linlithgow) (SNP)

I declare my role as Scottish Environment LINK’s nature champion for Scotland’s extraordinary blanket bogs. The carbon that is sequestered in Scotland’s blanket bogs equates to one third of the carbon that is held in the Amazon rainforest. Does the minister agree that, with that extraordinary resource at our disposal, those lands must be systematically restored to help Scotland to reach its climate change targets? Will she commit to working closely with industry partners, including, for example, onshore renewable electricity companies, to ensure that peatland restoration is a prime consideration of permissions? Will she make sure that national planning framework 4 planning guidance ensures that renewable energy generation on those lands delivers peatland restoration in partnership, and in a sensible and pragmatic way, to protect that vital asset and to deliver net zero targets?

Màiri McAllan

I absolutely agree with Fiona Hyslop. Peatland restoration is an essential part of the linked challenge of the climate and nature crises, and it has the unique opportunity to provide co-benefits across our environment, our economy and our society.

I commit to continuing to engage closely with the renewables industry as we transition to net zero. That includes discussing ways in which the industry can balance the actions that it can take in relation to greenhouse gas mitigation and the protection of the natural world.

The member is correct in saying that Scotland’s planning system will play a vital role in responding to climate change, encouraging nature recovery and helping to deliver the crucial infrastructure that is needed to achieve our ambitions. I do not want to pre-empt the outcome of the final NPF4, but it will signal a turning point for planning, and we have been clear that responding to the twin challenge of climate change and nature loss will be central to it.

Question 7 has not been lodged.

Warmer Homes Scotland Scheme

To ask the Scottish Government how many households it has written to promoting the warmer homes Scotland scheme since the start of the cost of living crisis. (S6O-01403)

The Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights (Patrick Harvie)

Households can obtain free help and advice through various routes, including via direct mail to households living in or at risk of fuel poverty. For example, local authorities write directly to property owners in areas that are targeted by our area-based schemes. They might also refer them to Home Energy Scotland and to our warmer homes Scotland service. We do not keep a central record of those activities.

Yesterday, we launched our one-stop cost of living website, which provides a wide range of advice, including schemes to tackle fuel poverty.

Mark Griffin

I draw members’ attention to my entry in the register of members’ interests, which states that I am the owner of a rental property in North Lanarkshire.

In recent parliamentary answers, the minister has advised that Home Energy Scotland is meeting its targets to speak with low income, potentially fuel-poor clients, with 42,000 having been offered support in the past financial year. However, the number of installations as a result of those interactions is just 5,300.

The Government has targets for interactions and advice calls, but what would the targets be for the number of installations under the new contract? Does the new contract allow for enhanced promotion of the scheme, with local delivery teams on the ground able to make referrals directly?

Patrick Harvie

I am happy to engage with members from all parties on the development of the new contract but, as things stand, warmer homes Scotland, which is, of course, a demand-led scheme, provided support to more than 5,300 households in 2021-22, despite being impacted by the Covid pandemic. That is among the highest figures since the scheme began.

We are leading the way in these islands in supporting households in fuel poverty. In fact, the chairman of the British Energy Efficiency Federation, Andrew Warren, recently wrote:

“My advice to Whitehall is simple. Whether you take the high road or you take the low road, you had best be copying Scotland’s initiatives.”

We will continue to develop and seek to go further, but we are making excellent progress in supporting people with energy during these difficult times.

I have three requests from members to ask supplementary questions. I would like to take all three, so I make an appeal for succinct questions and answers.

Willie Rennie (North East Fife) (LD)

Over the past five years, home insulation schemes have been completed in fewer than 1,000 projects in my North East Fife constituency. That is 1,000 out of 40,000 homes. We are in the middle of a climate emergency and now a cost of living crisis. That level of support is pathetic. How will the Government get more homes insulated quickly?

Patrick Harvie

I am sorry that Mr Rennie chooses to denigrate the work not only of Government but of our partner agencies, whose support to households in 2021-22, as I said, involved the highest numbers since warmer homes Scotland began. There is no need for that kind of language about the work that people are doing throughout this country to support people in the cost of living crisis, including with the cost of energy.

There is a huge amount more to do not only in the current context but throughout this decade to retrofit our homes for energy efficiency and zero emissions heating. I hope that, in the future, we will see political parties across the chamber joining us in ensuring that we pursue that as ambitiously as we can.

Stephanie Callaghan (Uddingston and Bellshill) (SNP)

Has the Scottish Government assessed how many households are excluded from receiving external wall insulation through the warmer homes Scotland scheme due to living in non-traditional, steel-framed houses? What financial support might be available to those who do not qualify for that essential work but would like to improve the insulation of their homes to save energy?

Patrick Harvie

Warmer homes Scotland provides a bespoke package of energy efficiency and heating improvements that are suitable for each specific property. Some £55 million has been allocated in 2022-23. That is the highest-ever figure. More than 70,000 fuel-poor households have benefited from external wall insulation as part of area-based schemes. That includes properties with non-standard construction and steel frames. We have allocated £64 million to local councils for those schemes to support the improvement of hard-to-treat properties.

I encourage everybody—whatever kind of property they live in—to contact Home Energy Scotland to explore the support that is available to them.

Edward Mountain (Highlands and Islands) (Con)

I refer members to my entry in the register of members’ interests.

There are 530-plus social houses in Wick that require to be upgraded to energy performance certificate C. I estimate that that could cost more than £20 million. If we extrapolate that across the Highlands, the cost of getting social housing up to EPC C could be much more than £100 million. Will the Government help those houses to get up to EPC C?

Patrick Harvie

We work closely with the social housing sector to understand the scale of the challenge that confronts it and to support it through that. We will continue to do that in relation to energy efficiency and the critically important role that registered social landlords can have in developing heat networks, which are relevant in rural and urban settings. Just today, we launched the heat networks support unit, which will be an excellent support for the development of local projects in the years to come.