Chamber and committees

That might be what Liam McArthur wants to raise.

I suspect that if it was possible for the public sector to fund every penny of the transition and relieve all homeowners of the need to make any contribution, we would all love to do that. Can the member suggest a way of funding that? Is he actually suggesting that we do more than is in the heat in buildings strategy and pay for every penny of it from public funds?

Indeed. Many of the arguments that I made in my opening speech about giving certainty to the industry and to the supply chain to invest in acquiring and sharing skills will be critical. That is why a clear, bold approach to regulation will be important.

On regulation, several members, from both an urban perspective and a rural perspective, have raised the issue of buildings with mixed ownership, mixed tenure and mixed use, including Kaukab Stewart, my constituency MSP. I live in one of those mixed-tenure, mixed-owner, mixed-use pre-1919 tenement blocks in Kaukab Stewart’s constituency, and we are very aware of their particular challenges.

I thank the committee for its on-going work on the issues arising from the retrofitting of buildings. As Ariane Burgess noted in closing her speech, that is an enormous challenge that we must confront together as a critical part of our response to the climate emergency.

The challenge is significant in part because of the scale and pace of the emissions reduction that we need to achieve across our building stock. That includes switching more than a million homes from fossil fuels to zero-emissions heating by 2030. It is ambitious because it needs to be. Parliament has set us the statutory requirement to reduce emissions by 75 per cent by 2030. What we are debating today is what we need to do in our homes and other buildings to deliver that. Not delivering it is simply not an option.

Although we must be clear-eyed about the scale of the retrofit challenge, we must also recognise that investment in the heat transition brings great opportunities: green jobs in a burgeoning clean heat sector; new skills and training; and greener, healthier and more efficient homes and workplaces across Scotland.

Last October, I published the heat in buildings strategy, which sets out an ambitious policy package to progress those objectives. I am not for a moment shying away from the fact that the actions that we have committed to are only the start of a multidecade programme of work up to 2045 and beyond. The strategy is a strong foundation, but much work remains to be done to realise an unprecedented transition.

I am therefore grateful to the committee and to other members for joining this debate, and for their input into the efforts to move to zero-emissions heating and energy-efficient buildings. I am keen that we develop a cross-party consensus to take forward that agenda.

I want to highlight three broad issues that are fundamental to making the transition a success. The first of those is public engagement, which Ariane Burgess, the committee convener, mentioned.

I was pleased to hear that committee witnesses suggested that COP26 had raised public awareness of the need for action. However, we need to recognise that most people do not yet have a clear understanding of what that means for their homes. Zero-emissions heat systems, such as heat pumps and heat networks, enjoy long pedigrees in many other European countries but are unfamiliar to most of us in Scotland. I want that to change in a way that engages people in a shared understanding of the need for that change and how to make it.

The upcoming dedicated national public energy agency will play a central role in public engagement. It will also support the streamlining of our delivery programmes by bringing new co-ordination and leadership to the issue and making it straightforward for people to access advice and support as and when they need it.

The second point that I will touch on is certainty. Building owners need certainty about what is needed to meet the requirements of net zero, and companies in the supply chain require sight of a clear pipeline to invest in and grow their businesses. Therefore, a critical component to our approach of creating certainty will be to introduce regulations.

Building on existing standards that require action on energy efficiency and zero-emissions heating, we will introduce regulations that will, from 2025, require all homes to reach a good level of energy efficiency—EPC C rating or equivalent—at point of sale or change of tenancy. From the same year, regulations will also begin to require action to be taken on buildings’ heating systems as we phase out the need to install fossil fuel boilers.

Later this year, I will publish a consultation on those proposals. I will introduce legislation during this parliamentary session and I look forward to working with the appropriate committees, as well as the wider Parliament, on developing those regulations.

By happy coincidence, the next paragraph in my speech begins, “The third issue I wish to raise is cost.” I recognise that members and members of the public have serious questions. At the beginning of a multidecade programme of work, no Government would be in a position to say what will happen right through to 2045 and beyond. However, we have committed at least £1.8 billion in this session of Parliament to kick-start the growth in markets for zero-emissions heat and energy efficiency and to support those who are least able to pay. I am pleased that, this morning, we announced almost £9 million of support through the low carbon infrastructure transition programme, with an impressive variety of projects that provide zero-emissions heat across homes and non-domestic buildings.

One project in particular will be of interest from a retrofit perspective: a grant of £1.27 million to the reheat project led by Scottish Power Energy Networks to install heat pumps in 150 homes along with smart controls and innovative heat batteries that are manufactured by Sunamp in East Lothian. As well as decarbonising the homes that are participating in it, that project will generate insight into how the grid can accommodate a greater role for electricity in heating our homes, which will minimise the need for capacity upgrades and will drive costs down.

Public investment in the heat transition is critical, but we have to be clear eyed. We estimate that the total cost of the heat and energy retrofit transition to 2045 will be in the region of £33 billion. That sum is clearly beyond the level that the public sector could bear alone so, alongside public investment, we need innovative mechanisms to increase individual and private sector investment into energy efficiency and zero-emissions heating. Therefore, we are establishing the green heat finance task force to recommend ways that the Scottish Government and the private sector can collaborate to scale up the investment. The task force will provide an interim report by March next year and final recommendations by September that year.

A just transition means sharing the benefits of climate action widely while ensuring that the costs are distributed fairly. That means that we must continue to support those who are least able to pay, and that is why we will publish a refreshed energy strategy and just transition plan later this year. It also means that those households, organisations and businesses that have the means will share some of the costs, particularly where they benefit directly.

The transition to zero-emissions heat will be an enormous project, around which we must work together if we are to play our part in halting damaging climate change. I am proud of the leadership that we are showing in Scotland, and I welcome the contributions being made both within the Parliament and across the country to charting an effective and fair course to decarbonising our buildings.

I thank everyone who has taken part in the debate. There have been a number of areas of cross-party consensus. I hope that I misunderstood the last part of the previous speech, which at some points sounded like a call for slowing down—saying that we cannot deliver on the timescale to which we are committed. Of course, the timescale to which we are committed is designed to be consistent with the climate targets for which the entire Parliament has voted. I hope that the cross-party engagement that we have is about how we do that, not whether we do it and not whether we should slow down.

The committee should be commended for its work—not only its evidence session but the constructive correspondence that it has had with me and other ministers—and for bringing the debate to the Parliament.

I will not have time to address every issue. That is partly because the topic is a cross-cutting matter, as several members mentioned. It deals with the remit of not only the Local Government, Housing and Planning Committee but the NZET Committee. It also deals with social security and skills and includes health and equalities issues. The agenda covers an incredible breadth—not just my portfolio or the remit of a single committee—so I have no doubt that there will be many opportunities to continue to discuss the issues that I do not manage to cover in my closing speech.

I want to mention some of the issues that were raised by the main Opposition parties in opening the debate. Both Labour and the Conservatives emphasised some of the current issues around energy bills, fuel poverty and the cost of living—and they are absolutely right to raise those issues. If we were in a position in this Parliament of being able to debate tariffs, levies, VAT, the price cap or the idea of a windfall tax on fossil fuel companies to provide support for the transition, we would no doubt have a lively debate, and all parties would bring their ideas to the table. Those issues are of course decided at UK level—even the issue of rebalancing gas and electricity prices, which will be important and is a matter on which we pressed the UK Government. I hope that those members who do not agree that those powers should be exercised here will work with us to press the UK Government to take the action that is necessary.

Miles Briggs and Mark Griffin raised some issues, albeit from slightly different perspectives, around the experiences that people have had in the past of existing schemes that have replaced fossil fuel with zero emission heating or of energy efficiency measures. Miles Briggs mentioned social housing tenants who had been in touch with him to say that they had a bad experience. I am aware of some cases like that; I have also visited many people who say the opposite, and who have saved more than half of their heating bills and have reliable, controllable heat as a result of air-source heat pump-fuelled heating networks.

The point is that, whatever happens in what is a multidecade programme of work, we should avoid treating either the best or the worst individual experiences as a stereotype. Even fossil fuel heating systems and other forms of home improvement have involved good and bad practice. Mark Griffin talked about “cowboys” being active in the field. I should say—because nobody else has teased him yet—that it is traditional for members to say, “Thank you to the minister for providing advance sight advice of the statement,” and I return the compliment.

On the range of technologies that Mark Griffin mentioned, our emphasis is on what are known as low and no-regret measures. As I said in my opening speech, I recognise that many of those are less familiar in Scotland, but they are tried and tested technologies that have been used successfully in many other countries. The critical thing for replicating those other countries’ experience of using technologies well in Scotland is building the skills that are needed to design, deliver and maintain new systems to the highest standard, with emphasis on supporting those who are most in need. We agree on that—it was another theme in the speeches of Mark Griffin and others. Indeed, the warmer homes Scotland scheme has helped tens of thousands of households who are most in need, saving an average of £300 per annum per household. The successor scheme must continue to do that, as well as enabling the ambitious reduction roles that Scotland has set and helping those who are in hard-to-treat properties.

We are considering how those buildings will be incorporated into our approach to regulations. There might need to be differences in relation to compliance periods or the trigger points that will be used.

We are establishing a short-life working group to look at the options for the regulatory approach to tenement buildings—that is, tenements in the broadest sense—and we will follow-up the recommendations of the Scottish Parliamentary working group on tenement maintenance. Also, the Scottish Law Commission will be undertaking a law reform project with a view to producing a draft tenement maintenance bill.

Presiding Officer, I recognise that I am over time. I have not managed to touch on every issue that I would have wished to. I am sure that this will not be the last opportunity to debate what is, as I have said, an extremely long-term agenda in the years and decades ahead. Once again, I thank the Local Government, Housing and Planning Committee for bringing the debate to the chamber.

I thank all members who have contributed to a constructive debate. It is clear that there are some issues of substance that we will disagree on. Some are calling on us not to do certain things; others say that we are not going nearly fast enough. We will have those debates and perhaps disagreements—that is all legitimate.

I want to pull out one point that has come across from right across the spectrum. The importance of home has been recognised in speeches from all parties. We have learned more about that and maybe understood that at a deeper level in these days of Covid, in which more people have had to work from home or have been isolated and cooped up together. The necessity of making the right to adequate housing a real, delivered human right in our society and of recognising that not everybody’s right to adequate housing is being met is really important, as is recognising the meaning and importance of home.

Residential properties are not principally speculative investments or substitute pensions; they are principally homes. That is what they are for, and that must be our priority. I hope that, whatever differences we might have on points of detail and individual policies, we will all continue to stick to that principle and work towards the realisation of adequate housing being a human right that has to be met everywhere.

In the time available, I want to run through some of the contributions and, in particular, I want to talk about all the amendments that we will vote on.

Miles Briggs opened for the Conservative Party. Obviously, we disagree on some fundamentals, but we have some important points of agreement. Not least, we thank the organisations that sent briefings. Many of them have worked with me to help to shape our thinking ahead of the publication of the strategy. The Conservatives have expressed support for measures to support those who are experiencing or are at risk of domestic abuse as well as for action on illegal evictions. I think that I heard support for action on winter evictions, as well. If there is any common ground that we have there, I will certainly look forward to working together on that.

However, I do not agree with the Conservative amendment, the budget analysis in it, or the focus, for example, on the rural housing fund. That fund is not, by a long way, the only way in which social housing is provided in rural and islands areas. In fact, during the previous parliamentary session, more than 6,000 social homes were provided in rural and islands areas. The amendment would also delete a lot of the ambition in the Government’s motion, so we will not support it.

As I have said, it is clear that one of the fatal flaws in that system has been placing the onus—the whole responsibility—on local government to generate the data and produce an evidence base to show that rent pressure zones are necessary. That is why I believe that an effective national system of rent controls is needed.

When it comes to the fixation on market values and on the operation of a free market, it is abundantly clear that such an approach to housing has failed far too many people. In any case, housing is not just a market commodity; it is a human right. There is a moral case for fair rent, which I believe is equal to the moral case for fair wages. These days, few people would question the need for a minimum wage and for the state to intervene in what would otherwise be an extremely exploitative free market. The case that we need to make is every bit as clear.

In that case, I once again thank everyone who has contributed to our thinking in developing the strategy and who has contributed to the debate. It is clear that Scotland is on a journey to a much fairer position for tenants in the private and social rented sectors, as well as in the more niche, unconventional areas of rented accommodation. I invite the Parliament to share my ambition for a new deal for tenants in Scotland to make that fairer Scotland possible, and to support the Government motion as well as the Labour and Liberal Democrat amendments.