Chamber and committees

The Scottish Government is certainly conscious that the current wholesale electricity market is not fit for the delivery of our net zero ambitions or, as the member highlights, for tackling fuel poverty.

Electricity market reforms and wider energy policy interventions must have the aims of reducing costs for Scottish consumers and businesses, ensuring that communities feel the benefit of the energy transition, protecting investment in our renewables industry and supporting decarbonisation.

We are determined to address the higher levels of fuel poverty that are found in rural communities such as the one that I live in, and we have already taken action to ensure that our energy efficiency schemes seek to achieve that end by spending more per head on installations in those areas where we know that costs are higher.

Liz Smith has my sympathy on that point. The Scottish Government is more than disappointed about that, not just because of the slow roll-out in some areas of smart meters, but in relation to radio teleswitch service—RTS—meters. There are more than 140,000 of those in Scotland, as she will be aware, yet we have little idea how they will operate after the proposed ending of the signal to them in June.

Obviously, those are matters over which the Scottish Parliament and Government have no legislative power, but I assure the member that I am not slow in raising them with energy companies and with the UK Government, because we must get a solution to the issue before June.

I am happy to correspond with Liam McArthur on the issue that he raises specifically on Orkney. I acknowledge the point that he makes about island areas having among the worst fuel poverty rates in the country, so I will happily try to be of help.

On Liam McArthur’s first point, I do not see a contradiction in seeking to work constructively with the UK Government where we can on issues such as a social tariff, while pointing out the error of the UK Government’s ways. Its inactivity on the cost of fuel is leading directly to making people fuel poor.

That is another area in which we have had constructive conversations with the UK Government. We continue to call on the UK Government to explore mandating community benefits from renewable energy developments to maximise a just energy transition. Only the UK Government has the power in law to change that. However, the greatest impact will come from introducing a social tariff mechanism in the short term, to ensure that energy consumers are protected against high costs. Stuart McMillan’s point is well made.

I sympathise with some of what the member says. There is clearly a need to ensure that heat networks are regulated. As he suggests, that power lies with the UK Government and its agencies, but we make that point to the UK Government, because, if we are to see an increase in the use of heat networks across Scotland, as I hope we will, we must also undertake the work that is necessary to reassure consumers that they are dealing with a fair market and not one that is subject to the problems that the member has mentioned.

On the member’s first point, introducing the universal benefit to which she refers will, as I said, provide around 812,000 pensioner households with support each winter from an investment of £101 million, although it is clear that a number of pensioners who are not eligible for pension credit or other low-income benefits also require additional support.

On the member’s point about zonal pricing, we recognise that there are trade-offs and complexities in the debate on that subject and are aware that it must be introduced in a way that does not have significant impacts for all market participants. However, as I also said earlier, the current system is not fit for purpose and requires urgent reform.

There has been a consultation on Ofgem’s standing charge option within the price cap. The consultation suggests that any changes will not fix the fundamental issue with the standing charge system. Failing to address the unfair cost of standing charges and overcomplicating bills is perhaps not an effective way of dealing with the ever-increasing debt in the system. It is worth adding that it is doubtful that much of the energy debt will ever be paid.

We welcome Ofgem’s original consultation on standing charges. Many people are continuing to struggle with high energy bills, and standing charges of more than £350 not only contribute to higher levels of fuel poverty; they also undermine energy efficiency improvements. We would look for reform in that area.

The Scottish Government’s attempts to mitigate the worst of the UK Government’s actions in this area have brought 800,000 people within the benefit of our scheme, so I do not feel any need to apologise about that.

It is worth saying that no Scottish Government can ultimately mitigate every act of vandalism that the UK Government performs against Scotland, but we do our best in the areas where we feel we have the resource and where we wish to prioritise it.

As I said a moment ago, I would not attempt to take away from the important international events to which the member refers, not least the illegal full-scale invasion of Ukraine. However, not very long ago, the member’s party told us that fuel bills would be coming down by £300.

The member asks what the impact on poorer groups would be, and it is relevant to say that the impacts are aggravated by the winter fuel payments situation that pensioners have faced. As I have mentioned, the Scottish Government is attempting to undo some of that impact as best we can.

I come back to the statistics that I mentioned in my statement. The efforts that the Scottish Government and the wider Scottish body politic are making to bring down fuel poverty are having beneficial effects, but they cannot outweigh a lack of action at the UK level to deal with the fundamental cause, which is the cost of energy.

Despite the significant criticisms that I have made of the UK Government, I have to say that we have had a good conversation and, more than that, good co-operation with the UK Government in attempting to progress the issue. However, as I mentioned, what was significant about our conversations about a social tariff is that people want it to be based on a simple system, not an applications system that, almost by definition excludes the most vulnerable people. They want it to include factors such as income, rurality and benefit entitlement. The most important thing that came through, however, was that the system must not be based on an applications process, because that will simply exclude the very people who need it.