Chamber and committees

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.

A number of countries, including some in Europe, have a system of rent controls and are not seeking to abolish it, and they are not saying that it has had huge unintended consequences. What about the consequence of not acting? Mr Balfour and I both represent cities that are seeing wildly disproportionate, way-above-inflation rent increases. Do we simply not act and allow that to happen?

There are contesting analyses of how we look at that budget. That is always the case. Pretty much every year, political parties, analysts and others try to cut and slice the budget in different ways, in order to present their own particular preference.

I will touch on the point of disagreement about rent controls. Miles Briggs asked what assessment had already taken place. We are not yet at the point of having a fully developed proposal on rent controls, but we recognise the depth of the problem and the need for it to be addressed. We are open to hearing all points of view on the particular design of a rent control system. We have been very clear. We need to gather far more data—detailed data—on rent levels and on the other aspects of the private rented sector before we are able to design and present finalised proposals on that. We will keep an open mind.

Miles Briggs rose—

I will take one more intervention, if I have time.

If I have time for one more intervention, I will.

I am grateful for that, Presiding Officer.

Bob Doris makes very fair points, and I hope that such arguments will come across in the consultation responses. Tenants’ voices are critical if we are to shift some of the power imbalances and address some of the injustices that exist. Hearing those voices can now be better organised in many places in the social rented sector, but there is still scope to do things better and to learn from best practice. I hope that people will take the consultation as an opportunity to put forward constructive ideas for how to achieve that.

I am seeking views on existing private rented tenancies and the grounds for repossession, and I am exploring how tenants can feel more at home in their rented property through simple things such as being able to decorate or keep pets. Those things might be seen as trivial by some people, but they are critical to the feeling that a house is a home and to supporting people’s wellbeing and mental health.

I am proposing new restrictions on evictions in winter. There are a number of questions around defining how that will work, on which we want to hear views. That is in addition to ensuring that the penalties for illegal evictions in the private sector are a meaningful deterrent.

I am highlighting the need to help people who live in non-traditional rented accommodation—from student accommodation to residential mobile homes, and from the Gypsy Traveller community to people in agricultural tenancies.

It is right to raise standards, but it is just as important to ensure that renting is affordable. On average, people who rent privately spend more of their income—more than a quarter of it, and for some, much more than that—on rent.

The social rented sector already has some safeguards in place to protect tenants from high rent rises, and all the money from rents should be reinvested for the good of tenants. The position is inconsistent, to say the least, in the private rented sector, where approaches to rent setting can vary dramatically among landlords. We are therefore consulting on how to introduce an effective national system of rent controls by 2025 for privately rented homes, with appropriate mechanisms to allow local authorities to introduce local measures.

I recognise that campaigners for that policy are impatient; some people even argue that we should use emergency coronavirus legislation to bypass the need to consult. I do not agree with that. The Scottish Parliament has always consulted before legislating, where that is possible, and that is as it should be: it helps us to make better law. The weakness of the 2016 reform to create rent pressure zones is a warning about legislation that is developed swiftly without adequate testing or dialogue.

I want the new system to be one that works for the long term. That means collecting the information that we need, learning from what works well elsewhere and taking the time to get it right. We will improve the collection of data on rents and other factors in the private rented sector so that we have the evidence needed to inform an effective system. A more detailed consultation on rent control will follow later in the session, as we gather that evidence and as building the evidence base picks up pace. At the same time, we will consider how best to share good practice and improve affordability in the social rented sector, too.

Affordability and supply are of course closely linked, and I know that Parliament will support my commitment to our expanded programme of building 110,000 affordable homes, 70 per cent of them being for social rent, by 2032. That programme is on a larger scale than any for decades, and I am determined to work with colleagues across both Government and Parliament to ensure that every contribution counts—public, private, community and third sector—in achieving that goal.

New homes for rent are rightly a major theme in the new deal for tenants, but most of the homes that we will live in in 2040 are already here today. That is why we are seeking views on how we can improve quality and raise standards across the whole rented sector, both in physical buildings and in the services that are provided to all tenants. With that in mind, I am seeking views on establishing a new housing standard for all homes.

I could say more. There is a great deal to do, and a great deal of work ahead of us throughout this session of Parliament. There will be no shortage of views, and the consultation is open for the next 16 weeks, so that everyone can engage on the wide-ranging and ambitious aims of this agenda.

I believe that the draft strategy will deliver a new deal for tenants, with stronger rights, greater protections against eviction and access to better, more affordable homes. That will help us to deliver a fairer Scotland, to tackle child poverty and to meet our climate change targets.

I urge MSPs across the chamber to support that ambition, to contribute their ideas and to join me in welcoming this new deal for tenants.

I move,

That the Parliament notes the publication of the consultation on A New Deal for Tenants, which seeks views on the Scottish Government’s ambitious plans for the rented sector; agrees that the 1.85 million people who live in the rented sector should have improved quality, standards and rights in the place they call home; supports the aims of A New Deal for Tenants to ensure tenants have more secure and stable tenancies, flexibility to personalise their homes, improved safeguards against eviction, improved regulation and effective national rent controls in the private sector; recognises that this strategy will support progress towards the human right of an adequate home for all, and welcomes, therefore, this draft strategy seeking to make renting a home more affordable, safer, with a higher quality, better managed and more secure.

I need to move on, I am afraid.

I come to Labour’s position. I recognise the long-standing case for intervention that has been made by Labour colleagues. I believe that our intention to lay the framework for the data collection machinery that we need will start to build on that case. That is what is to be proposed in the year 2 housing bill. From my exchange with Mark Griffin early in the debate, I understood that that was the intention of his amendment, and I will support it on that basis.

It is clear that, if we are to take action, we need to take the time to get the detail right. Some elements of what is proposed in the strategy will take until 2025—near the end of this parliamentary session. Other measures, such as those on rent adjudication, will happen much earlier. I hope that we will continue to work with Labour colleagues on that. In addition, I recognise Pauline McNeill’s long-standing work on the issue, and I thank her for the opportunity to work constructively on it, as I will be very happy to do.

We must be clear. This is not about saying, “No change until 2025”—far from it. It is about saying that a schedule of work will begin in the short term and will work through to 2025—for example, on pre-action protocols, as Mark Griffin also mentioned.

There is a review of student accommodation. I will write to Pauline McNeill with more detail on that.

In the Liberal Democrat contribution, Willie Rennie recognised the level of cold, damp, overpriced properties that are still out there—the reality of the problems that the strategy seeks to address. A lot of his focus was on social renting. Pre-pandemic, we were clearly on track to meet the target for delivery for social housing. The pandemic has provided a massive challenge to everybody when it comes to the construction sector, but the 110,000 homes target is a clear commitment. As far as I understand Willie Rennie’s amendment, he does not seek to up that figure to an arbitrary and unfunded target but to put pressure on us to deliver the target to which we have committed. On that basis, I will support the amendment.

I will come on to winter evictions later. As Pam Duncan-Glancy knows, some of the temporary coronavirus pandemic measures around discretion at the tribunal are to be made permanent. I hope that she understands that I am not able to comment on court actions.

I will take another intervention—this time from the back of the chamber.