The next item of business is a debate on motion S6M-16750, in the name of Shirley-Anne Somerville, on supporting households with cost of living pressures and rising energy bills.
14:21
I welcome the opportunity to open the debate on supporting households with on-going cost of living pressures. As the motion notes, the recent energy price cap hike by the Office of Gas and Electricity Markets is the third increase in a row; the price cap is 9.4 per cent, or £159, higher than this time last year. That again emphasises the relevance and importance of such issues to people across Scotland.
I will take a moment to add further context for all of us in the chamber. Last week, we read news reports—indeed, there were more again this morning—about the Labour United Kingdom Government’s planned £6 billion cut to welfare spending. That is turbocharged austerity on the backs of some of our most vulnerable constituents. Let me be very clear that the Scottish Government will never accept that, and we are urgently calling on the UK Government to scrap those plans ahead of the spring statement later this month. I certainly hope that Labour MSPs and their leader will join me in that call.
The Scottish Government’s foremost priority is ending child poverty in Scotland, and I strongly reiterate that commitment today. Poverty limits a child’s opportunity, health and wellbeing, and the on-going cost of living crisis is only worsening the poverty premium that those at the sharpest end face. However, we know that the reality is that the cost of living affects many people—even those on middle incomes—in their daily lives. As a result, the Government continues to take immediate action through our budget, with more than £3 billion to tackle poverty and help with the cost of living crisis for households. That package spans a range of support for energy bills, childcare, health and travel, as well as social security payments that are either not available elsewhere in the UK or are more generous here.
As the First Minister has said, the budget delivers the things that make the difference to people today, and it lays the foundation for a hopeful future in which Scotland can grow and further prosper. Our interventionist approach to delivery addresses the issues that have a direct and immediate impact, day in and day out, on families in Scotland. That begins with the essentials of food, warm and safe homes, good jobs and money in people’s pockets. The budget is about investing in the people of Scotland and our communities.
As many families struggle with the cost of living and soaring energy bills, our budget provides immediate support for day-to-day costs. It commits more than £6.9 billion for benefits expenditure, which is almost £1.3 billion more than the UK Government gives to the Scottish Government for social security. Within that, £644 million of our package of payments is for payments that are available only here in Scotland. That is essential support, such as the Scottish child payment, which puts money directly into the pockets of low-income families. We know how important certainty is in addressing competing household costs. That is why I was pleased to attend the Social Justice and Social Security Committee last week to confirm in law the annual uprating of benefits in line with inflation.
In the coming financial year, we will invest £768 million to boost delivery through the affordable housing supply programme, which we estimate will support the delivery of at least 8,000 affordable homes. However, stakeholders, including the Joseph Rowntree Foundation, have highlighted that the biggest pressure on household bills is from rising rents. Although the Scottish Government is doing what it can, by introducing measures such as rent controls in the Housing (Scotland) Bill, the Labour UK Government continues to drag its feet on critical measures such as the local housing allowance.
It sounds as though the cabinet secretary’s argument would be justification for opposing what the Scottish Government intends to do to the Housing (Scotland) Bill. Its amendments intend to lock in above-inflation rent rises everywhere, even where rent control areas are in place. Even if it is only at this late stage, will the Government change direction and think again on that?
I appreciate the work that Patrick Harvie has done on the issue over many years. However, I fundamentally disagree with him on that part of the proposal. We feel that it is important to have such a cap, and we will lodge amendments on that. However, it is also exceptionally important to give certainty to the private rented sector and private developers, because we need to ensure continued investment in Scotland. There is a balance that we must strike. I am absolutely committed to the delivery of rent controls, but it is also important that the Government supports private rented sector landlords and private developers that seek to invest in Scotland.
The Minister for Housing has written to the Secretary of State for Work and Pensions to call for the local housing allowance freeze to be scrapped in the upcoming spring statement. I hope that Labour members will join us in making that call.
The Scottish budget will help to tackle the housing emergency by supporting immediate actions that will return existing housing stock to use and will increase acquisitions. We will also invest an additional £4 million to enable local authorities, front-line services and relevant partners to prepare for the new homelessness prevention duties.
Because the best and most sustainable route out of poverty is good employment, we are investing up to £90 million in the delivery of devolved employability services. That includes specific funding to continue supporting parents towards and into employment and then sustaining it, and to embed child poverty co-ordinators in our local authorities.
We are investing more than £2.6 billion to support public transport and to make our transport systems available, affordable and accessible to all. That will help to connect parents to employment, training and skills opportunities and the services that they need to navigate their way out of poverty. It also includes £415 million for concessionary bus travel, which enables access to free bus travel for 2.3 million people across Scotland.
We are continuing to expand the provision of free school meals so that more children can benefit. Overall, we will invest about £40 million to expand meal provision to children in primaries 6 and 7 whose families are in receipt of the Scottish child payment and to trial an expansion for those in secondaries 1 to 3 in eight local authority areas. Over 25,000 more children will benefit from that support.
This year, the budget for local government provides record funding of more than £15 billion, which represents one of the largest increases in funding in recent times. Indeed, the local government settlement will have increased by more than £1 billion when compared with that for 2024-25, including funding allocated for this year’s pay deals.
The Scottish Government has acted decisively to lower household costs. In November, I announced that the Government would invest a further £20 million in the Scottish welfare fund’s budget, to be distributed to councils in the current financial year. That increase is helping councils to meet increased demand on the fund and to provide vital support to people who are in crisis.
I also confirmed that we would invest an additional £20 million in the warmer homes Scotland scheme, which is our national fuel poverty scheme, to take the total investment there to £85 million in the current financial year. The scheme focuses on long-term sustainable measures, and that additional funding will help about 1,500 additional households to install energy efficiency measures and more efficient heating systems.
In November, I announced that I will introduce regulations that, in the winter of 2025-26, will introduce a universal pension age winter heating payment of at least £100 for every Scottish pensioner household. Pensioners who are in receipt of a relevant low-income benefit will receive £200 or £300, depending on their age. That universal benefit will provide much-needed support that is not available elsewhere in the UK, and it will apply to all Scottish pensioner households, as was always the intention before the UK Government made the cruel and undignified decision to cut the winter fuel payment for those more vulnerable pensioners in our society.
Let me be clear that, once again, when Westminster chose to stand by as energy bills rocketed and chose to rip away vital support such as the winter fuel payment, the Scottish Government took action, and we have delivered. Today, we will go further. I am announcing more investment to ensure that families get the help that they need, when they need it. In the year ahead, we will continue our support for the Wise Group’s relational mentoring programme by making just over £2.1 million available. That will allow the Wise Group to provide vital wraparound support to about 2,000 families, which will help them not only to address immediate needs but to make longer-term improvements in their lives.
We know that our action is making a difference; it is helping to improve the lives and outcomes of people in households across Scotland. However, our efforts are being undermined by the policies of the UK Government—not least the two-child cap. That is why we will develop the necessary systems to deal with the impact of the two-child cap in 2026, with the Child Poverty Action Group forecasting that scrapping the two-child cap in Scotland could lift 15,000 children out of poverty. The Tory two-child cap is now the Labour two-child cap, and it is the Scottish Government that will deliver for the people of Scotland and rid them of that despicable policy. Frankly, it is unforgivable that the Labour Party is standing idly by while children are being pushed into poverty every single day because of that policy.
We are also continuing our child winter heating payment, through which we provided £7.8 million last year to support more than 33,000 children, young people and their families who had higher energy needs due to disability or a health condition. That benefit is not available elsewhere in the UK.
This coming winter, we expect to invest more than £65 million in total in our three winter heating benefits. Those programmes provide vital support with energy bills to more than 630,000 people.
Of course, work is vital to supporting families in Scotland. The University of Dundee announced this afternoon that more than 600 jobs will go because of the university’s £35 million deficit. What responsibility do the Scottish ministers have for the situation that Dundee university and other universities in Scotland are in on account of their education policies towards universities?
If Mr Kerr has read the statement from the university, he will know that it has set out some of the reasons behind its policy. I disagree with Mr Kerr—I believe in free education. I am sorry that he does not, but that is a predictable response from the Scottish Conservatives. However, as he knows, universities are institutions that are independent of Government, and he should be careful about suggesting that the Scottish Government should interfere in the day-to-day running of a university.
So, it is nothing to do with you, then.
Mr Kerr, I know that you are aware that you should not be shouting from your seat. Cabinet secretary, please continue.
I am afraid that, once again, Mr Kerr is demonstrating that he is not at all interested in the people of Scotland who are suffering from the cost of living crisis. He is not apologetic for the austerity that was delivered by successive UK Governments, including that of his party, but which is now being turbocharged by Labour. He is not apologetic for the rising energy costs, and nor is he thinking that anything should be done about that, whereas the Scottish Government certainly is.
It is very disappointing that we are seeing further increases in energy costs. That is not what the electorate were expecting when they voted Labour, and it is certainly not what the electorate were promised. We know that more than 53 per cent of fuel-poor households in Scotland are in extreme fuel poverty, which means that they spend more than 20 per cent of their household income on energy. That is wholly unacceptable in the age of renewables and when Scotland is an energy-rich nation. However, responsibility for the fundamental shift and the action that is required lies with the UK Government.
Despite the policies that we are implementing, which I have underlined today, much needs to be done in the UK Parliament. We need urgent market reform and community benefit, and we have to recognise and act on the direct link between some of our most vulnerable constituents experiencing high energy costs and facing deeper poverty. Exacerbating existing inequalities by stripping away the support that was there is pushing more and more people into poverty and making that poverty deeper. The Scottish Government is determined to deliver, and is delivering, as much support as we can for people in Scotland with regard to their energy bills. However, there is a limit to how much we can continue to mitigate the effects of the UK Government’s policies—
Will the cabinet secretary take an intervention?
I apologise to Mr Lumsden—I am just about to wind up.
We can go only so far in mitigating the worst excesses of Westminster. The Scottish Government has already spent £154 million this year alone on mitigating the impact of welfare decisions—and that is just on welfare.
As I set out at the start, the planned further cuts that are coming from the chancellor in the spring budget statement are deeply concerning for people across this nation. As a Parliament, we have to do all that we can within our powers to protect people during the cost of living crisis. However, we also have the opportunity today to stand together to call on the UK Government, before the spring statement, not to deliver those welfare cuts; to actually deliver some support for people who are suffering because of high energy prices; and to deliver on the promises that it was elected to deliver on.
I move,
That the Parliament notes that Ofgem’s energy price cap has soared to £1,849 for the average household, which is the third increase in a row and 9.4% (£159) higher than this time last year; recognises that this will compound cost of living pressures for households across Scotland; welcomes the Scottish Government’s action in the recently passed Budget (Scotland) (No. 4) Bill, including the reintroduction of universal winter fuel payments for pensioners and through energy efficiency programmes; believes that reforming energy markets and harnessing Scotland’s renewable potential will bolster energy security and, in turn, reduce consumer bills, and calls on the UK Government to make urgent progress on delivering its commitment to reduce bills by £300, against which no progress has yet been made.
Members will wish to be aware that there is time in hand this afternoon.
14:36
In recent days, we have, as a nation, rightly been consumed by the news from Washington—by the utterly unacceptable and bullying rhetoric of the Trump Administration as it tries to undermine the established relationships within the western world and to hamper moves towards peace in Ukraine after three long years of war.
As we watched on, aghast, at what was unfolding on our television screens, the governor of the Bank of England, Andrew Bailey, was giving evidence to the Treasury Select Committee. He was warning of another American attack on the western economies, through trade wars. The impending tariffs that America has placed on Canada, Mexico and China have already triggered retaliatory responses, and the governor was extremely blunt about the detrimental effects on Britain’s economy should those trade wars escalate further, most especially in terms of new global inflationary pressures and on productivity growth. That is exactly what we do not need at the same time as the on-going cost of living pressures and rising energy bills, which—as we know from our constituency mailbags—are probably still what worry people the most.
As the cabinet secretary mentioned, since October the energy price cap has risen three times in a row: it rose by 10 per cent in October and 1 per cent in January, and it is to rise by 6.4 per cent in April. The result is that the annual bill for a household using a typical amount of gas and electricity will go up to £1,849 per year, which is an increase of £111. These are worrying times, and that is even before we come to the politics of it all. I dare say that, for the purposes of the debate, we will have to come to the politics, but I want to look at the bigger picture.
The Labour Government is still promising to cut energy bills by £300 by 2030. That statistic has been widely disputed by economic analysts, and it certainly does not fit well with Labour’s decision to remove the winter fuel payment as a universal benefit to all pensioners. The significant cutback of the winter fuel payment meant that just 130,000 older Scots received the payment this winter, with approximately another 900,000 older Scots losing out during the winter. Labour put that down to the need for a debate about priorities and universalism.
That part is right. There is an important debate to be had about the principle of universal benefits, particularly when there will be no fiscal sustainability in the foreseeable future. Indeed, I have been arguing for such a debate for many months. However, if we are to have that debate, the principles that we must apply must have regard to those who are most in need and to a strong evidence base on which policies are the most effective in mitigating poverty and vulnerability. When it comes to Labour’s winter fuel policy, it falls foul on both of those counts.
Those criteria of examining vulnerability and substantiating evidence should challenge the Parliament. For example, I have said several times in the chamber that I believe that the Scottish Government’s Scottish child payment policy is effective and well received, but there are other aspects in relation to which the evidence on welfare benefits is much less clear and the pressures of the welfare spend are such that they are now way out of reach of the Scottish Government’s budget.
Will the member take an intervention?
I will in a minute. I say again that it is all very well having a social contract with the people of Scotland until we find that we cannot afford it and that, because it is a priority, other aspects of policy making cannot be undertaken.
I hope that what I am about to say is helpful. We have been advocating for quite some time for there to be a social tariff for fuel bills. I believe that tackling the issue at source is the way to make long-term differences and to ensure that we do not have to put universal benefits in place to fill the gaps and mitigate the costs of electricity and gas and, indeed, of welfare cuts. However, I am not sure what the Scottish Conservatives’ position is on the idea of a social tariff at source for vulnerable consumers.
We have put it on record that we support that. However, the key point that I am trying to get across is that we must have evidence of what works best. One of the reasons why such a tariff might work best is exactly the one that the cabinet secretary gave—it is levied at source.
When it comes to the overall perspective on universal policies, we cannot afford to do everything that we would like to do. That is the point. To make judgments about what we should be doing, we must examine the evidence on effectiveness, but we must also look at the greatest vulnerability.
That is the problem that the UK Labour Government is facing at the moment with welfare benefits, just as the Scottish Government is finding out that we cannot afford to do everything that we would like to do. That is the reality that we have to understand when it comes to setting policies in this place.
As Conservatives, we are always being criticised for being obsessed with economic growth, but I reject that criticism on two counts. Economic growth is essential because it leads to more jobs, better pay, lower poverty rates and better education, and because economic growth is essential to welfare and to a feel-good factor among businesses and industry.
We are also criticised in relation to Liz Truss, and rightly so, but Liz Truss’s fault was not her aspiration to deliver economic growth; it was that she failed to take the advice of the financial institutions and to interpret the market trends correctly. That should be a lesson for the Trump Administration, as we can see if we look at today’s papers, as the markets have had a considerable shake. It was that refusal to listen to the advice that was so unforgivable and did such damage to the UK economy at a critical time, but it did not mean—and it does not mean now—that the aspiration for economic growth was the wrong principle.
That is where we took issue with the Scottish National Party’s recent budget, which entrenched the high-tax agenda without pointing to any signs of an ability to deliver better public services. It is all very well to say that the lowest-paid in Scotland have seen their taxes reduced to the tune of the princely sum of £2 a month, which I do not think will be of much use to them, but the fact is that middle-to-higher earners are being squeezed beyond their means, which is causing businesses in Scotland to be concerned about some aspects of recruitment and the increasing tax differential with the rest of the UK. I am quite sure that that is why the Deputy First Minister has expressed her concerns about the persistent rise in tax.
Liz Smith talks about the Scottish economy as being a high-tax economy, but does she accept that, in countries such as Denmark, taxes are considerably higher and public services are considerably better?
As someone who has visited some of those countries, I know that their delivery of public services is an awful lot better than it is in Scotland. One of the great problems that the Scottish Government faces just now is that the reason for having a high-tax agenda is surely to deliver better public services. However, that is simply not the case at the moment, which is a serious issue for most people.
We also know that, in one in every two of our small businesses, the most reported obstacles to their success did not relate only to the high-tax agenda. Some 62 per cent of small businesses mentioned the increases in energy prices, and it is not surprising that half of small businesses complained about taxation, VAT, pay as you earn, national insurance and business rates. Two thirds of the businesses that were surveyed said that the Scottish Government’s income tax policy had a huge impact on their business, with the construction industry being the most impacted sector.
Those policies—namely, the high-tax agenda and low growth—will not help to address the cost of living pressures but will instead exacerbate them. The SNP’s idea of keeping taxes high is not an agenda that will address our concerns.
To make matters worse, the SNP Scottish budget came in conjunction with the Labour UK budget, which was also intent on damaging the economy by punishing the wealth creators of the UK with increased national insurance contributions—a tax on jobs. That will increase considerably what businesses have to cope with.
Labour and the SNP both talk a great deal about supporting the economy of the future, and they are right to do so—whether that relates to life sciences, financial services, new technologies or artificial intelligence—but they do the exact opposite when it comes to oil and gas. My colleague Douglas Lumsden will expand on that in his speech.
There is also the issue of housing—I see that the Minister for Housing is in the chamber. We have had many debates on housing. The Acting Cabinet Secretary for Net Zero and Energy, who is sitting beside the housing minister, rightly made the argument about the need to address things at source. Housing is one way in which we can do that. The current statistics, which I think were rehearsed during topical question time just before this debate, spell out the extent of the challenge that we face on housing.
I began my contribution by referring to the international situation because I firmly believe that that is a hugely important backdrop to the economic circumstances in which we find ourselves. Some of those circumstances are well beyond our control, but that makes it even more important that, in Scotland, the UK and Scottish Governments work together to address the issues that concern our voters the most: their jobs, their family budgets and the delivery of effective public services.
It is no secret that the Scottish Conservatives believe that the recent budgets have confirmed that both Governments are moving in the wrong direction, because there is not sufficient focus on growth, lowering the tax burden or removing the barriers to business that stifle entrepreneurship and innovation.
I move amendment S6M-16750.3, to leave out from “welcomes” to end and insert:
“notes the ongoing concerns amongst the Scottish business community about the effects of the widening tax differential between Scotland and the rest of the UK; further notes the failure of both the UK Government and the Scottish Government to prioritise policies that will deliver sustained economic growth, investment in infrastructure and more efficient public services, and calls on the Scottish Government to take a balanced approach to net zero, which includes supporting Scotland’s oil and gas industry and ending policies that worsen cost of living pressures.”
14:48
I am pleased to follow Liz Smith. Although I did not agree with everything that she said in her speech—as colleagues might have guessed—I think that she made some important and serious points, as she always does in her speeches. I believe that she will be missed when she leaves the Parliament at the election next year. This is the first opportunity that I have had to say that to Liz Smith, so I want to put that on the record as we begin the debate this afternoon.
A lot of what Liz Smith said about the seriousness of the debate and the seriousness of the issues is important and pertinent. There can be no more important issue that we debate in the chamber than the cost of living crisis and the pressure that it puts on the people we all seek to represent.
So, I am slightly disappointed that the tone of the Government’s motion seems to be somewhat unserious in many respects. In recent weeks, there has been a return to the sort of grudge-and-grievance politics and debates in the chamber that we were all too familiar with in the earlier years of this parliamentary session. When the new UK Labour Government came to power last summer, we made it very clear that we did not want to play our part in those grudge-and-grievance politics and squabbling. It was about coming together and trying to work together to further improve the lives of the people of Scotland. There have been very positive steps in that regard, particularly in the field of energy and energy security, with Governments working together to tackle the challenges of energy prices. I want to make it clear that I welcome the opportunity to discuss what more we can do across the UK and in the Parliament to ensure that we support our constituents as they struggle through the cost of living crisis.
We cannot get away from the context in which we meet this afternoon. We know that many of the shocks that the energy market has experienced result from the full-scale invasion of Ukraine and the challenges that exist therein, as has been outlined, including the volatile reaction of world leaders—not least President Trump—and the on-going issues that the Prime Minister and others are having to deal with on an international scale.
The member mentioned the invasion of Ukraine and how that affects our energy security. Does that not make an even stronger case for production of our own oil and gas, so that we can increase our energy security?
Douglas Lumsden knows that I believe in an energy mix and that we must continue to use the resources that we have in Scotland. I also believe that it is vital that we open up the potential for a just transition away from oil and gas, while taking the resources opportunities that are available to us, not the least of which is nuclear power, which I will come on to talk about.
Although Ukraine is a huge part of the context, we cannot get away from the actions of the previous UK Government. Liz Smith referenced Liz Truss—I feel that she knew that members would mention her mini-budget. We continue to live with the effects of the decisions that were taken without due consideration of the impact that they would have on borrowing rates, general finances and the economy. We are still living with those shocks. It is absolutely the case that we can argue the point about the inheritance of the Labour UK Government, but we cannot get away from the fact that those decisions are having a knock-on impact, as we meet today.
Will the member give way?
I will give way to Stephen Kerr, then I will make some progress.
Does Paul O’Kane also accept that a shock was contained in last October’s budget? That shock has been delayed, but we will begin to feel it as of next month, when, it is reported, hundreds of thousands of businesses are planning to let people go because of the tax increases that Paul O’Kane’s Labour Government is forcing on them. There is an aftershock from Rachel Reeves’s October budget, is there not?
I will not take a lecture on tax from the Conservatives, who placed the highest tax burden on working people in more than a generation. The issue has been well debated in the chamber. If Mr Kerr’s party had made different decisions, we would be in a very different place and the £5.2 billion funding for Scotland would not, in fact, be available.
I said at the outset that I feel that the Scottish Government’s motion is fundamentally unserious. The Scottish Government wants to pretend that the new UK Labour Government has done absolutely no work to begin to tackle the issues and to look at them in a serious way and in detail. We must take a moment to reflect on the actions that have been taken. We should all welcome the UK Labour Government’s recent announcement that it is expanding the £150 warm home discount scheme, so that 220,000 more Scottish households will receive help to reduce their energy costs. That scheme provides energy bill support to the people who are most in need. The result of that UK Labour Government intervention is that one in every five families in Scotland is now eligible for help with their bill. That is a total of 500,000 households.
The UK Government is not just expanding that lifeline scheme; it is also delivering an extra £41 million, through consequentials, to the household support fund, to provide support. The cabinet secretary and I have had many debates about that, because it took quite some time to understand what the Scottish Government’s plans were for those Barnett consequentials and the difference that they can make in supporting people in Scotland.
I have already mentioned in my exchange with Stephen Kerr the £5.2 billion that was allocated to the Scottish budget at UK level, which has sought to end what was, quite frankly, a period of Conservative decline and inaction.
Will the member take an intervention?
I am conscious that time is available, so I will give way.
In previous debates and exchanges, Paul O’Kane has spoken with passion about the need to support disabled people through the social security system.
Paul O’Kane mentioned Barnett consequentials. What is the Scottish Labour Party’s view of the UK Government’s proposed potential cuts to disability benefits, which would have a consequential effect on the Scottish Government’s available resources?
Mr Macpherson used two very telling words: “proposed” and “potential”. [Laughter.] I do not know the detail of the green paper—perhaps members opposite know—but I do know, because we debated it last week, that there is a very important discussion to be had—
Will the member take an intervention?
I will just finish this point, if the cabinet secretary will allow me to do so.
There is a very important discussion to be had about the fact that the social security system is not working and is broken. We have to invest in supporting people who want to work but who face too many barriers to getting into work, because that is an important part of ensuring that people can receive an adequate income.
I agree that we should support people into work.
What Mr Macpherson’s question was alluding to is whether Mr O’Kane would like to put on the record now, before he knows the final details of what is in that green paper, what he thinks the UK Government should do? Would he back the calls to ensure that we protect disabled people, particularly those who are on child or adult disability payment, from cuts by the UK Labour Government?
The cabinet secretary perhaps did not hear me say that I believe that we have to invest in supporting people who want to work to get into work. We need to reform the system.
On ADP, the cabinet secretary and I have had this debate, so we know that already in the system is a £1 billion overspend in block grant adjustments, which we had to have a debate about. Indeed, for the first time last week at committee, the cabinet secretary acknowledged the challenge in that, and it is a stark situation. We have to look at how Social Security Scotland is working and how its systems can work more efficiently.
Multiple interventions have been made since the UK Government came into office, but there are challenges here, as well. The Scottish Government wants to ignore the fact that it has a responsibility to ensure that we have the energy mix that I mentioned, which can provide more sustainability and self-sufficiency and bring down bills. The Scottish Government has a long-standing aversion and opposition to nuclear power, as I have already referenced today. We know that planning approval for Berwick Bank is waiting on desks.
Will the member take an intervention?
I will finish, if the cabinet secretary will allow me to do so. I think that I am rapidly running out of time.
There is quite a bit of time in hand, but it is up to the member.
I will finish my point, if the cabinet secretary will allow me, because she might want to respond to it. The Berwick Bank approvals have sat delayed on ministers’ desks for years, the Government has failed to deliver on its commitment to create a publicly owned energy company and it is selling off the sea bed on the cheap in the latest round of ScotWind options. Perhaps Gillian Martin will comment on some of that.
I do not really want to comment, because I am making an intervention to ask Paul O’Kane a question. Will more nuclear power being generated in Scotland bring down the bills of people in Scotland?
I think that keeping the lights on is an important point—
That is a no, then.
The cabinet secretary is shouting at me from a sedentary position, but she could not answer any of the questions that I put to her. I am trying to say that ensuring that we have a strong energy mix and keeping the lights on are important to bill payers and will, in fact, keep bills down. It really is time that the Government considered its position on many of those issues.
Since the general election, the UK Labour Government has started long-term work to secure our energy future and the energy market. Last week, we heard the announcement of funding for expansion of Port of Cromarty Firth, so that it can make floating offshore wind turbines on site in the UK for the first time.
Proposals were set out just yesterday to reduce energy rates for communities that accept the need for new and upgraded pylons being sited near them, to ensure that the communities benefit from building the infrastructure that will be absolutely necessary in order to ensure energy sufficiency.
Those are just some examples that reflect the importance of ensuring our energy security, which can bring down bills in the long term, which is what the Labour Government pledged to do.
The cabinet secretary and Liz Smith touched in their opening remarks on the wider issues that exist in relation to the cost of living. It was welcome that we heard about the extra funding that will be provided to the Wise Group. I met it just last week to discuss many of the issues, and it said to me that fuel poverty cannot be considered to be unique and separate from general poverty or from the work that we have to do more widely to tackle all facets of poverty. There is a discussion to be had on what we can do about energy bills specifically, but that issue cannot be separated from the wider discussion.
I am proud of the work that the UK Government has undertaken to support that vision. The increase in the national living wage will result in a pay rise for 200,000 of the lowest-paid Scots, and the Employment Rights Bill will ensure rights for workers in well-paid and secure work. The UK Government is ensuring that the state pension will rise by £470 and that the debt repayment rate for Scottish families who are in receipt of universal credit will increase, on average, by £450 a year. We rehearsed many of those issues in the debate about the economy last week.
It is clear that we are talking about a very serious issue. It calls for the two Governments to be willing to work together to ensure that we have energy security and that we bring down people’s bills in the long term.
I move amendment S6M-16750.4, to leave out from “notes” and insert:
“recognises that there are significant cost of living pressures in the UK and globally; further recognises the impact that rising energy bills have for families and communities across Scotland; welcomes the recent announcement by the UK Labour administration that it is expanding the £150 Warm Home Discount scheme so that 220,000 more Scottish households receive help to reduce energy costs; further welcomes the other support delivered by the UK Labour administration, including an extra £41 million in funding this past winter for the Scottish Government and delivering a record budget settlement for Scotland; demands that the Scottish Government works to urgently introduce greater support in the short term and accelerate insulating and decarbonising homes to bring down energy bills in the long term, and calls on the Scottish Government to deliver the policies that the Scottish Labour Party is calling for, such as scrapping peak rail fares, delivering affordable housing and keeping council tax low while boosting Scotland’s energy security through its sprint to clean power to keep bills low.”
I remind members that, at this point, we have a fair bit of time in hand.
15:00
Like Paul O’Kane, I begin by acknowledging Liz Smith’s recent announcement about her future. She has the distinction among Conservative members that, even when she says things that I find objectionable, she always says them in a constructive tone of voice. That is something at least—not all of her colleagues are able to manage that. I wish her well on a personal level, as I do other members who have made similar announcements.
I am grateful for the chance to debate the wide range of issues that are raised in the motion, including the wider cost of living agenda and specific energy issues, which connect to last week’s debate on energy policy. However, this debate would have benefited from a slightly more open and reflective approach from Labour and the SNP, which seem to be using their motion or amendment for today’s debate principally to lay out their stall about what their Government is doing. I acknowledge the reason why they might want to do that, but the truth is that there are positives and shortcomings from both Governments.
The importance of the issue cuts across party-political differences in many areas. As well as the inflation of recent years, there were many years of austerity and rising inequality in our society and around the world, so improving people’s living standards urgently is something that the Scottish Government, the UK Government and, frankly, any part of the political spectrum that believes in democracy and basic values of equality and human rights need to tackle, because the far right is now a sufficient existential threat to those assumptions about our society. It is very successful—frighteningly successful—at tapping into people’s genuine anxieties about their standard of living, so there is an urgent need to raise people’s standard of living in order to politically inoculate our society against those toxic values. Liz Smith unsafely made the assumption of good faith on the part of far-right politicians such as Trump and, indeed, Liz Truss. That assumption should not be held.
I will look at the record of the two Governments. On the Scottish Government side, there are, of course, positives to talk about. For example, recently, there was the rent freeze, although, sadly, there will now be a cliff edge instead of a taper that would have allowed people to have a soft landing from that temporary policy. There is free bus travel for under-22s, and action has been taken over a number of years on the cost of the school day. There is the continued commitment to free prescriptions, and we do not saddle students with tens of thousands of pounds of debt before they have even started their careers. There is the commitment to take action on the two-child limit and the winter fuel payment, and benefits—including unique ones such as the Scottish child payment—have been uprated. Therefore, the Scottish Government has taken many positive steps.
I also want to acknowledge the positive steps that the current UK Government has taken.
If we are to provide all those universal benefits—a case can be made for virtually all of them—does Mr Harvie agree that we need to have a serious debate about the level of funding and to make some very difficult but nonetheless essential choices about cutting back on some public expenditure that we simply cannot afford?
We need to have a serious conversation about cutting back on the level of chronic inequality in relation to the distribution of wealth in our society, because that is the fundamental problem. If we want Scandinavian levels of public services—which I do—we need Scandinavian levels of taxation. We cannot have high levels of public services and US levels of taxation. The lack of a wealth tax is critical in that regard.
I want to come on to the UK Government, which has taken really positive steps, such as raising the minimum wage and capping bus fares. The warm home discount is mentioned in Scottish Labour’s amendment. Although there is still some ambiguity about it, the UK Government is open to some element of a role for public ownership in energy through Great British Energy. I still want to know more about the detail of how that will work, because there is a lack of clarity.
Both Governments also have major shortcomings. The UK Government has no willingness to use rent controls, for example, and it still permits precarious working conditions. It refuses to bring in progressive income tax, which has already been shown to be effective in Scotland, or a wealth tax, which is one of the things that is so lacking, given the structure of inequality in our society. Even if GB Energy is successful in bringing about more public ownership of the energy system, Labour is still willing to do the bidding of the nuclear industry lobbyists, despite the eye-wateringly high price of both new and old nuclear.
Paul O’Kane says, quite honestly, that he does not know the detail of the incoming benefit cuts; I do not know the detail either—none of us does with 100 per cent certainty, but we certainly know that they are coming. The cuts will not cause pain for the likes of us—those of us who sit in the chamber on generous salaries. They will be targeted at those who are much more vulnerable.
On energy, the single biggest step that I would like to see from the UK Government is the decoupling of energy bills, because the artificial link between gas and electricity prices means that the cheap, abundant, clean, green and renewable electricity that we are generating is not benefiting people in their bills.
As for the Scottish Government, it is watering down rent controls proposals and has reintroduced peak-time rail fares. We could have moved straight away to a £2 bus fare cap—we managed to persuade the Government to go to a pilot, but we could have skipped that stage.
The most glaring area of absence of action is energy efficiency. The cabinet secretary mentioned it in her speech and motion, but the heat in buildings bill is the critical policy tool that is needed to drive investment in the clean heat sector and give regulatory clarity and financial support to those who need it.
Even now, running a heat pump can be just as cost effective as running a gas boiler, and with a modern, much more efficient heat pump and flexible tariff, doing so can cost as little as half the price of running a gas boiler. However, people need the financial support—either through loans, green mortgages or other schemes, such as grants—in order to shift towards making such an investment, which would lead to financial savings from energy bills.
Last week, the First Minister told the Parliament:
“The Government is considering all the issues that were raised in the consultation on heat in buildings. We will respond as soon as we can.”—[Official Report, 6 March 2024; c 16.]
The trouble is that that is precisely where things stood a year ago. The bill was on track to be introduced in November, but now it is missing without explanation. I hope that the cabinet secretary will explain the delay in her closing speech, because further delay to the bill is unacceptable, risks the legislation failing to pass during the current parliamentary session and leaves the entire industry at a complete loss as to whether it is worth investing in the skills, capacity and supply chain that we need to bring down future costs. The bill must be introduced now and, in her closing speech, I hope that the cabinet secretary will explain where it is and what has happened to it.
Thank you, Mr Harvie. I call Willie Rennie to open on behalf of the Scottish Liberal Democrats. You have a generous six minutes, Mr Rennie.
15:08
Liz Smith was right to open her contribution by putting the issue in context. In the main, all that we have discussed this afternoon dwindles into insignificance compared to what could be coming.
Mr Trump is trying to change the way that the US economy works. He is trying to bring jobs back to the United States of America and is determined to do almost anything in order to achieve that. As he has acknowledged in recent days, it might be turbulent in the short term but his long-term goal is quite clear. He is very transactional in that process and is prepared to run over almost anybody to achieve it. We need to be wise to that and we need to recognise the enormous challenges that it poses to us.
We therefore have to recognise that the Prime Minister has played a pretty significant role so far. By getting alongside Mr Trump, he has tried to persuade, influence and effect change. I do not know how successful he will be—I am sure that he does not know—but he is right to try to do so. The way that he has tried to create a bridge between Europe, Ukraine and the United States is exactly the right thing to do. We need to listen—mostly listen—incredibly carefully, because we will need long-term solutions that will be to our benefit.
I agree with Willie Rennie’s sentiments and the generous manner in which he makes those reflections. I put it to him that an equally profound risk for Britain is that the high energy costs here—four times greater than those in the US and an average of 48 per cent higher than the average in Europe—mean that industrial activity is really under threat for commodity products that can be manufactured in just about any modern country. We stand on the precipice of losing not just Grangemouth but many more such industries over the next decade.
Fergus Ewing and I have been working closely with a lot of those very industries. I worry deeply about the long-term consequences, as well as about the dumping of cheap steel from China into other markets around the world and the consequences that that will have for our domestic production and our internal security.
One of the most significant parts of the cabinet secretary’s speech was when she spoke about the long-term solution in the support that she is providing to the Wise Group and its relational mentoring programme, which I have been impressed with. It looks to try to calm households, to bring them out of poverty, to give them the tools to be able to sustain themselves and to lift out of poverty the children in those households. It is about putting a sustainable future in their own hands, which is surely what we have to try to get to. As I have said before, although I am a strong supporter of the Scottish child payment, it simply covers up the fact that there are many children in Scotland who are in a precarious position and whose families are unable to support themselves. That is what we should be trying to tackle—and seeking long-term solutions for—to make sure that such families are able to sustain themselves.
The economic inactivity rate in Scotland is shocking—it is 24 per cent—and it is not much better in England, at about 21 or 22 per cent. Those economic inactivity levels should deeply concern us, not just because our economy is weaker due to our not having fiscal returns from those individuals who could be paying their taxes, but because it is not good for them either. If they already have deep-rooted health problems that make them incapable of working, the lack of work will compound those particular problems by not giving them the goodness of work.
I think that work is good. We should be encouraging people into work and giving them the means to work. A big part of that is that our national health service is not supporting people to get back into work because the waiting lists are so long, particularly for the new causes of economic inactivity in relation to mental health, autism and attention deficit hyperactivity disorder, for which the waits are just enormous. We should therefore be looking at the deep-rooted issues with the way in which our public services support people to get back into work.
However, as I have said, I support the child payment, and we will support the Government’s motion.
Another area that I hope that the cabinet secretary will look at closely is the operation of insulation programmes and home energy system support. The application process for the installation of heat pumps and other home energy systems is too complex and takes too long. As a result, the installation of new technologies is far too slow—it is a fraction of what we need to get to if we are to tackle the problem.
It is the same with insulation. The Scottish Government stopped publishing the figures constituency by constituency when I started publishing press releases in response to that. In north-east Fife, there are 40,000 homes. Home Energy Scotland boasted that it had insulated a few hundred homes in the past eight years, which is a fraction of what we should be doing. I recognise that we have area-based schemes, but that is still a fraction of what we should be doing. Why is retrofitting those homes so slow? We surely should be speeding up the process, which, again, would help people with their bills at home.
My final point is about the campaign that my colleague in the Highlands, Angus MacDonald MP, has been running, as I know others in the chamber have done, about decoupling gas and electricity prices. In 2021, the average lifetime cost of producing onshore wind was 39 per cent lower than the cost of gas generation, and the cost of producing solar power was 11 per cent lower than that of gas generation, so why is the price that people pay for electricity in their homes so high? That particularly disadvantages people who live off-grid in the Highlands—in the places that Fergus Ewing and others represent. We must try to resolve that problem. We know that the Office of Gas and Electricity Markets is looking at decoupling at the UK level, but that should be accelerated, not only to bring down people’s energy bills, but to incentivise the use of renewables.
The long-term issues and solutions that we should be looking at are economic inactivity, the support that is available for home energy, the decoupling of energy prices and, first and foremost, helping individual families to help themselves out of poverty.
15:16
I say at the outset, as others have already said, that it is a wee bit disappointing that we have only four Labour and four Conservative members in the chamber for such an important debate.
People in my constituency do not need me to tell them that their energy bills are rocketing and that Labour’s cost of living crisis is getting worse. They know that and they know who is to blame, so they want to hear what we can do about that here, in Scotland, and how this Parliament is helping despite the madness of Trump in the USA. It looks as if he is ramping up tariffs on Canadian steel and aluminium to 50 per cent—as we all know, the situation has gone mad with Mr Trump.
Our powers in this place are limited and we have a fixed budget to tackle many of the issues that people face, but there are plenty of examples of how this SNP Government is helping, some of which I will cover today.
We cannot overlook Labour’s disastrous performance in Government. The party was in the door for just five minutes before pensioners were robbed and abandoned. Energy bills have gone up, not down, as Labour promised, and the poor, the disabled and the most vulnerable are in for it if the rumours of another £6 billion of cuts heading our way are accurate. The easiest targets of all—pensioners and the disabled—will be made to pay for Labour’s tenure in office so far. The cost of living crisis is certainly here, but Labour is making it worse.
With some justification, Labour can point to the appalling legacy left by Liz Truss, which has already been mentioned a few times today. The Treasury biscuit tin was empty when the Tories left, but Labour must have known that before last summer’s election. The civil service always briefs any potential incoming Government on the state of the public finances, so Labour either did not understand that message or chose to ignore it and to carry on making false promises to the electorate to get a foot in the door.
“Read my lips: no austerity under Labour”
and promises to save jobs at Grangemouth will forever be millstones around Labour colleagues’ necks.
Would the member like to comment on the £5.2 billion extra that the Scottish Government got in its budget this year and the £200 million that we got for Grangemouth that will help to keep jobs as well as create new ones as part of project willow?
I would certainly like to comment. The member describes that money as if it is some kind of handout or gift, but that is Scottish taxpayers’ money that is coming back to where it belongs. That money does not belong to the UK Government: it is Scottish taxpayers’ money.
What has the SNP done to help? For a start, the Scottish budget will help millions of households across Scotland. One thing that will make a big difference is the new pension age winter heating payment. Every pensioner household will receive £100 next winter, with some receiving £200 or £300. That might not be huge amount of money when we think about the energy bills that people are facing, but at least it is cash going to pensioners; it is not being taken from them by Labour’s soaring energy bills.
The Scottish budget will also provide £3 billion to directly support vulnerable and low-income households to help them to deal with Labour’s cost of living crisis. We already provide more than £200 million each year, reversing Labour’s austerity measures that it decided to keep in place when the Tories left office. We have a council tax reduction scheme in place, which helps nearly half a million households, and we provide free school meals to all P1s to P5s—which will soon expand to P6s and P7s who receive the Scottish child payment.
Talking of the Scottish child payment, it supports every eligible child in Scotland to the tune of £26.70 a week and has been described as a “game changer” in the fight to tackle child poverty in Scotland. We are helping to make our homes warmer and we will tackle fuel poverty, with £300 million going towards clean heating measures that will help to reduce bills. People on lower earnings can get help of up to £10,000 to heat their homes, and home owners can access grants of up to £15,000. They need a bit more help, as Willie Rennie pointed out, in making the correct choices that are appropriate for them, and trusted partners would be a great part of that. All of that is in the SNP budget, which is making a difference to the lives of people in my constituency and right across the country.
As usual, I am indebted to my East Ayrshire SNP councillors and some independent colleagues there for delivering the same kind of support directly to their communities in the council’s recent budget. The council has £1 million going in to support its anti-poverty and inequality strategy, with emphasis on affordable and accessible food. There are free school meals for all P1 to P7 children down there, plus half-price school meals for secondary pupils for the next two years. Clothing grants are going up to £75.
All of that was opposed by the rump of Labour councillors down there, who are left with their assortment of allies tagging on in desperation. The council could have done much more had it not been for Labour’s national insurance tax hike, which cost East Ayrshire £2.75 million. That has effectively added four percentage points on to the council tax bill. It is little wonder that the SNP won the recent Kilmarnock North by-election—when Mr Sarwar came down to make a cameo appearance during the campaign.
With a fixed budget each year, we have to do the best that we can with what we have and to offer hope to our people that their SNP Government will help, when the unionist Labour and Tory parties contrive to attack our most vulnerable citizens instead.
We have done this. I am proud of what the SNP has achieved in office, and I look forward to the day when we no longer need to mitigate the worst excesses of a failed, money-grabbing, broken union. I am delighted to support the SNP Government motion.
15:22
The Government has a bit of a nerve to present itself as squeaky clean in the debate. Actually, no party is—not mine, certainly not the SNP and definitely not Labour. Last week, my constituents in Falkirk learned that they would be subject to the highest percentage rise in council tax bills in Scotland, at 15.6 per cent, because Labour rejected the already high increase suggested by the minority SNP administration and suggested an even higher amount. You really could not make it up. Contrast that with Labour in South Lanarkshire.
I am grateful that my colleague Graham Simpson has raised the issue of the Falkirk council tax increase. That was a Labour motion. Does he know that it was supported by the only Reform councillor in Falkirk Council?
I was not aware of that, but it was a daft idea. We might contrast that with Labour in South Lanarkshire, where the council leader is seeking election to this place. South Lanarkshire has the lowest council tax rise in Scotland, but it is still inflation busting. Wherever people are, they will be paying significantly more in council tax, with an increase way above inflation, because of the way that the Scottish Government has hollowed out local government finances. We cannot blame councils for doing what they are doing—apart from Falkirk Council. Goodness knows what councillors were thinking of there.
On top of council tax, there are other, fiendish ways of raising money, from parking charges, for which Glasgow is particularly bad, to—in the case of prudent South Lanarkshire Council—introducing a new fee for collecting garden waste.
Council tax is a big and growing part of people’s cost of living, but, instead of forcing a freeze on councils, the SNP needs to properly fund them. Part of the reason for this year’s steep rises is a fear of a pre-election freeze next year to buy off voters. The gushing bit of the motion that backs the recent budget is therefore laughable. The budget has made things worse, not better.
In addition, energy bills, which have been mentioned, form a big chunk of the household budget. Bills are far too high; they are among the highest in Europe. Fergus Ewing told us why that matters. Part of the reason for that is our reliance on gas, for which the price is set on the international markets. Willie Rennie spoke of the need to decouple markets. Somehow, we need to break that model and set our own prices. I therefore agree with the Government that we need to reform the energy market—as long as the aim is to bring prices down.
I am pleased to hear Graham Simpson say that we need to reform energy markets. Can he tell us why the Conservative Government, which has not long left office, did not attempt to do that?
It should have looked at that, because the issue is serious and affects everyone—businesses as well as individuals.
However, the UK does not have the highest bills in Europe. That accolade falls to Germany, which has the highest electricity prices—which, as I pointed out last week, is connected to its getting rid of nuclear power.
We should not worry, of course, because Labour promised to cut energy bills by £300 a year. However, bills have gone up. As Liz Smith pointed out, from April, the annual energy bill for a household that uses typical amounts of gas and electricity will go up by £111 a year, to £1,849.
Ofgem chief executive Jonathan Brearley said:
“We know that no price rise is ever welcome”—
he is right about that—
“and that the cost of energy remains a huge challenge for many households”—
most households—
“But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, home-grown system.”
Even GB Energy, which has been mentioned—that ill-defined vehicle to deliver goodness knows what—might be getting its budget cut before it has even started.
According to a survey of 234 businesses that was conducted last month, 88 per cent of Scottish businesses have said that high energy costs are impacting investing decisions—which goes back to what Fergus Ewing said—while 77 per cent say that it has forced them to put prices up for customers.
We must not forget Labour’s disgraceful scrapping of the winter fuel payment. On the subject of benefits, if a Conservative Government said that it would cut the welfare bill by £6 billion, the members opposite would be apoplectic. However, we now have the bizarre situation of a number of Labour MPs backing such a move—including my own, East Kilbride and Strathaven’s Joani Reid. [Interruption.] If Paul O’Kane wants to intervene, he is welcome to do so; however, I notice that he does not want to.
The cost of living affects us all but, for too many, it has gone beyond what is acceptable. Transport is the engine of the economy. People and goods need to get about. People can sit and shiver at home as they try to cobble together enough money to pay the council tax but, at some point, they will have to go out. Even though the Government has abandoned its daft target of a 20 per cent reduction in car miles, that should not stop it from encouraging more people on to public transport by making that more affordable.
We have debated this before: reintroducing peak fares on trains—a move that this Parliament rejected but was ignored on—not only makes things more expensive but is likely to lead to fewer people using trains. Cheaper and simpler fares lead to 10 million more journeys, according to The Times this week.
Labour’s national insurance hikes will cost businesses £25 billion and lead to fewer jobs and higher costs for people. I am afraid that Paul O’Kane is in total denial on this.
Will the member give way?
The member is bringing his remarks to a close.
I would be very happy to take the intervention.
The member is already at seven minutes 40 seconds, and I think that it is probably time to bring his remarks to a close.
Okay.
Speaking of costs to businesses, we can also look at business rates relief, which was applied at 40 per cent in 2025-26 in England. Business rates here, in Scotland, will apply only to hospitality and music venues, and so retail loses out. That will have a major impact on our struggling high streets.
Liz Smith’s amendment mentions “growth”, which is a dirty word to some in the chamber, but she is right that it is vital. To that end, investment in infrastructure, such as the A9, is essential. We need to get Scotland moving to foster renewal and cut bills.
15:31
Earlier in the debate, Liz Smith spoke in a characteristically thoughtful way, drawing our attention, rightly, to the most serious situation facing the world in my lifetime. The common sense, always expressed with grace, that has been expounded by Liz Smith over her long period in Parliament will be missed by a great many. I hope that her Schools (Residential Outdoor Education) (Scotland) Bill will be passed by this Parliament—I am not quite sure what the whips have in mind for me in that regard, but I plan to vote for it anyway, so that is that. If I may gently break another rule, Presiding Officer, I say: Liz, we will miss you.
I will address a somewhat different perspective to that which has been offered so far, as the gravity of the issues requires us to consider the wider and bigger picture, and I am afraid that there is a foreseeable danger—a likelihood, I believe, sadly—that energy costs for people throughout the UK will rise further over most years for the next decade. A substantial reason for that is the factor that I mentioned in an intervention earlier, which is that, at the moment, much of the bill for running the grid is paid for by heavy industry.
The inevitable result of the high energy costs in the UK—which, according to the Institute of Economic Affairs, are four times those of the USA and 48 per cent higher than average European industry costs—is that, if what the internet tells me is correct, steel costs for manufacturers in the UK are £113 per megawatt hour, as opposed to £61 in Germany and France. In modern countries, we can produce steel, fertiliser, chemicals, concrete and all sorts of things. However, if our energy costs are of such a magnitude in excess of those of our competitors, I am afraid that we do not have to be Adam Smith or Warren Buffett to realise that something must give. We have noticed that Grangemouth is closing, and high energy costs seem to me to be—as the lawyers would say—the causa causans of that decision.
Britain has the highest industry energy costs in the world. We are likely to see the possible extinction of chemical manufacturing in the UK, alongside many other sectors. Why will that impact on consumers? Because of the enormous financial contributions that they make towards maintaining the transmission and distribution system. The planned upgrade of the grid is an enormous cost—we are talking about more than £1 trillion in total, according to some estimates. If we eliminate a huge chunk of the revenue, who will pay? People’s bills will go up, unless we are willing to open our eyes to such possibilities and change things radically.
Moreover, many people who currently work in those industries will simply retire—they will not seek other employment if they are of a certain age. Others who are younger might decide to do the same work in other countries, and then we will lose all their income. Sadly, others might end up in fuel poverty for one reason or another. That will further exacerbate the problems that we face today. In other words, we cannot isolate consumer cost issues from the wider economic picture—they are umbilically connected. If we ignore those factors, we ignore reality, and we might as well be re-enacting a grisly version of the emperor’s new clothes.
On energy prices for the UK, to paraphrase the great singer Al Jolson, if you think things are bad now, you ain’t seen nothing yet. I regret saying that, but what are the solutions? Decoupling the electricity market price from that for gas should certainly be considered. I think that it was rejected on 7 March last year, in the review of electricity market arrangements—REMA—process. I am not quite sure that, in itself, that would do anything other than change the way in which the deckchairs are arrayed. It seems to me that we need to look more widely. We must maximise gas production in the UK from the North Sea fields—for example, from Jackdaw. In doing so, we would support fields that produce oil and gas at much lower emissions. From the internet, we can see—I recently checked this with Equinor—that Rosebank will produce at carbon emissions of 12kg of CO2 per barrel. In Qatar and the USA, fracked gas is produced at nearly 80kg.
I am always interested to hear Fergus Ewing’s thoughts on such issues. One problem is that we have long warned that some of the fields that he mentioned, on which I will not go into detail, should have had stricter climate compatibility checkpoints that would have taken such matters into consideration. Does he think that not foreseeing the existing issues, and doing the critical work required, represents a misstep on the part of previous UK Governments?
I do not want to be political, but whoever did it was certainly stepping off a cliff. At one point, we were toying with that injudicious step forward as well—there is no point in denying it. However, if we got things wrong in the past, that does not mean that we cannot get them right in the future. We just need the guts to admit that we have to do that. More and more people are coming to that view in every opinion poll that is taken in Scotland.
Moreover, I understand that the technology for new gas-fired power stations is such that they are far more efficient and less emitting than either coal or nuclear ones, especially in the modern combined cycle, which can reach 60 per cent efficiency. Because the new plants capture and use the plant’s hot exhaust gases to spin a secondary turbine, which generates more electricity, less energy is lost in the conversion process of gas to electricity. Their efficiency rate is 60 per cent, compared with that for nuclear or coal, which is 33 per cent.
Will the member give way?
I think that I might not have much time left.
The member is bringing his remarks to a close.
Renewables are cheap when they operate, but the fact that they do not operate all the time adds to the constraint costs, albeit that those costs are greater for gas.
In concluding, I was going to make a remark about the Greens, but I do not think that I will spoil my peroration. I will just say that I hope that, across the parties, we can face reality, come to our senses, recognise that we need a proper mix, take emotion out of the debate and get back to common sense to ensure that our electricity system does not cost massively more for the people who sent us here.
15:39
Despite wholesale gas and electricity prices falling in the past two years, the public are still paying 43 per cent more than they were before Putin’s invasion of Ukraine. All members will have been contacted by constituents who are facing trouble with the cost of energy or inaccurate bills. No person should be faced with the choice of heating their home or feeding their family.
Communities have come together to support those people who are most at risk. Members will have received the briefing from the warm welcome campaign, which shows the 209 warm spaces that have been opened across Scotland, including Granton parish church and the Heart of Newhaven in Edinburgh. However, Governments must take the lead in protecting the most vulnerable and I welcome the Labour UK Government’s recently announced actions in that regard, such as expanding the warm homes discount to an extra 3 million families.
Will the member give way?
Let me make a bit more progress.
That expansion of the discount means that one in five Scottish households will be supported with their bills next winter. The UK Government is also taking action on energy debt, which increased by 20 per cent in 2023 alone, by working with Ofgem on a debt reset to give customers a clean slate after years of financial stress and stopping inaccurate bills and unlawful back-billing. Those common-sense changes will support households during a time of rising costs. I also support the review of Ofgem so that it meets the needs of consumers and is able to hold energy companies to account.
However, here, in Scotland, we should be going further in supporting the most vulnerable. I was contacted by a constituent who is chronically ill and must spend £143 a month to heat a single room, or she will fall seriously ill.
Will the member give way?
Let me make a bit more progress.
Her situation is not unique—carers, older people and disabled people are all facing similar struggles. The Scottish Government should use its record budget settlement from the Labour Government to ensure that no one is left behind. However, we should be clear that these solutions, although welcome, do not deal with the root cause, which is that the cost of energy in Scotland and the UK is the highest in Europe. In the long term, that is not sustainable for families and it is not sustainable for businesses.
I used to be involved in catering and I frequently speak with those in the restaurant industry who have had to close or downsize due to rising bills. That costs jobs and it costs the economy. We need to decouple ourselves from an unstable international energy market that leaves the welfare of Scots at the whim of Putin. The establishment and operation of GB Energy cannot come soon enough in that regard. GB Energy will deliver the energy independence that we need by investing in clean energy, which will lower emissions, create jobs and tackle the climate crisis. GB Energy will also invest in new and emerging technologies such as tidal energy and floating offshore wind, cementing Scotland as a global leader in the sector.
The retrofitting and upgrading of homes needs to be accelerated, as 44 per cent of Scottish homes have an energy performance certificate rating of less than C and, according to the Energy Saving Trust, increasing their EPC rating from D to C would save households up to 15 per cent on their bills. However, the Scottish Government has cut the energy efficiency and decarbonisation budget in real terms and the heat in buildings bill is stuck in limbo one year after the consultation was closed. If we do not lower energy costs and make buildings more energy efficient in the long term, Governments will be forced to continue firefighting by providing support to consumers when energy bills rise.
In this area, there is considerable overlap between devolved and reserved responsibilities. If we are to upgrade our energy grid and deliver for families in the long term, therefore, we need positive collaboration between the UK and Scottish Governments. I welcome the actions that have been announced by the Labour Government, including the warm home discount scheme and action to tackle energy debt. If we are to beat the problem permanently, however, we have to move to clean energy and bring down prices.
15:45
I welcome the chance to contribute in order to assert what is necessary to support households with cost of living pressures and rising energy bills. I thank Children’s Hospices Across Scotland and other organisations for their informative briefings.
The Scottish Government is taking clear and substantial action to support households by investing £6.9 billion in social security. In 2025-26, it will support around 2 million people with the cost of living crisis and it will, by providing more than £300 million in heat in building programmes, support more than 20,000 households to save up to £500 a year on their energy bills.
The debate also gives me a chance to highlight how local individuals and groups in my constituency have been working tirelessly to support those in need. Those groups offer targeted local support that works in tandem with the Scottish Government’s financial support. There are many, so I will name only a few. They include the centre81 initiative; Kilbowie St Andrews church; Improving Lives; Old Kilpatrick Food Parcels; and Dalmuir Barclay church. All provide warm hubs with food and drinks and a safe space in which to have a chat and socialise.
Many of those groups, and others such as West Dunbartonshire Community Foodshare, East Dunbartonshire Foodbank, which is based in Milngavie, and Faifley food share also provide food pantries, supplying thousands of food parcels for those in need. Going even further, the likes of the Recycle Room and Isaro Community Initiative, among many others, recycle clothes and household items and offer energy-saving advice to those who need it.
Having held annual cost of living events in Clydebank, which continue to be well attended, I know how valuable those local groups are to my constituents, and I am so grateful to them all. I welcome the cabinet secretary’s announcement today of the investment of £2 million that will fund wraparound support to households.
Prior to the general election in July last year, Labour said that it would lower energy bills by £300, yet, only months later, Ofgem announced that the price cap would rise to £1,849 this year. That is the third increase in a row, and the cap is 9.4 per cent higher than it was this time last year. Have Keir Starmer and the Labour Party been uneconomical with the truth? It seems so. A recent opinion poll found that just 12 per cent of Scots think that Labour will cut energy bills. That is appalling, especially when Scotland is such an energy source. Sir Keir Starmer must apologise for breaking his promises and urgently outline the emergency steps that he will take to reverse those huge increases to household bills. Scotland is an energy-rich country, yet, under Labour, families are being forced to pay electricity prices that are among the highest in Europe.
High energy bills will impact many people, but that impact will be particularly challenging for families who have a child with a life-limiting condition. Alongside the costs of specialist equipment and adaptations, those families often face higher energy bills, and family members are often less able to work because of caring responsibilities. According to CHAS, such families are often paying double the amount of the average household to keep their child safe and comfortable. It is a heartbreaking situation that causes significant stress for families at a time when they should be able to focus on their child.
Lack of action from the UK Government on energy bills has real and devastating consequences. I urge my Labour colleagues in the chamber to listen to the calls from CHAS and other charities for the UK Government to take forward a social energy tariff to ease financial pressures on vulnerable households that face high energy costs. It is welcome that the Scottish Government’s social tariff working group aims to make recommendations to the UK Government on the design of a social tariff mechanism.
To make matters worse, at the end of last year, the Labour Government made the appalling decision to cut the winter fuel allowance. In trying to make savings, Labour decided to pick the pockets of pensioners. Despite uproar from the public, it has refused to U-turn. Even Labour members voted at their party conference to reverse that cut. There are dreadful briefings that they are now targeting those who are on disability benefits. Paul O’Kane and his predecessor, Pam Duncan-Glancy, now have a so-called voice for those who are disabled, so that is absolutely betrayal personified.
The Scottish Government will mitigate the Labour UK Government’s cruel cuts and reinstate, for example, a universal winter fuel payment, ensuring that every pensioner gets a payment next year. That will come as a great relief to my constituents and pensioners across Scotland.
That is further proof that the SNP will prioritise and protect those who are in need. While the Labour Party pushes families into poverty, the SNP will protect them. I call on the Labour MSPs in the chamber today to call on the UK Government to make urgent progress to reduce energy bills for their constituents. We need action from their Government now, not later.
15:51
Let me take a different tack. For far too long, the people of Scotland have been sold the lie that more government and higher taxes are the answer to every problem. After years of expanding government, taxes and bureaucracy, we have a country in which people work harder but take home less, and pensioners cannot afford to heat their homes. It was brave of Foysol Choudhury to talk about families suffering a form of fuel poverty when his Labour Government has forced many pensioners into that situation.
We live in a situation in which businesses are labouring under the crushing weight of regulation and taxation, and SNP and Labour cling to their leftist fantasy that government is the solution when, in reality, it is a big part of the problem.
The SNP here and Labour at Westminster have raised income tax, frozen thresholds and imposed punishing council tax hikes while failing to provide basic services. They have made life more expensive and difficult. That is not government standing up for working people—it is government bleeding them dry. The average Scot now hands over nearly half of what they earn to the Government in some form of taxation. Between income tax, national insurance, VAT, fuel duties, council tax and endless stealth taxes, it is no wonder that working people are finding it harder just to stand still.
The Government takes and takes, and what do Scots get in return? They get crumbling roads, longer NHS waiting times, overstretched schools and local councils that cannot even keep all the street lights on. Where is all the money going?
Public sector employment has grown far beyond that which is sustainable, not because we are getting better services but because the SNP has spent taxpayer money on bloated bureaucracy. Scotland now spends more on Government administration per head than almost anywhere else in Europe.
Labour campaigned on the promise not to raise taxes, yet in October’s budget, it increased taxation by £40 billion and announced plans to borrow a further £142 billion. The SNP incoherently bemoans the cost of living while burdening people with the highest taxes of any part of the United Kingdom. When it comes to Labour and the SNP, it turns out that Rishi Sunak was right, especially about Labour’s tax plans, although even he underestimated the scale of their tax rises.
Stephen Kerr mentioned Rishi Sunak. First, I put on record earlier my point about the man who gave working people the highest tax burden in a generation. Secondly, will Stephen Kerr take cognisance of the fact that we had 14 years of a Conservative Government, as Liz Smith rightly did, and that we are now living with the reality of the decisions that Liz Truss made in her catastrophic mini-budget?
Paul O’Kane needs to think carefully about blaming the Conservatives for there being the highest tax burden in 80 years. I acknowledge that that was true at the time. However, the Labour UK Government, of which he is so proud, has since increased taxes even further. He has to be proportionate in this.
I acknowledge—and I think that Paul O’Kane should also acknowledge, because he is a man of integrity—that Labour has broken the promises that it made on taxes. That is especially true when it comes to the decision to remove the winter fuel allowance, which was one of the most disgraceful decisions that any of us can remember being made by a UK Government following an election during which it promised to do the opposite.
Meanwhile, as Graham Simpson mentioned, Labour’s GB Energy has been exposed as a sham. Its chief executive has admitted—very honestly—that it will take 20 years to create just 1,000 jobs. The SNP and Labour are blindly pushing net zero policies that burden households with costs while offering no realistic alternatives.
Compliance costs with green regulations are atmospherically high. I am grateful to Fergus Ewing for drawing the Parliament’s attention on previous occasions to the case of the Elgin procurator fiscal office, which is valued at £275,000 as a property and yet is set to have £3.5 million spent on it in a refurbishment. That is another expression of the kind of reckless spending—on chasing net zero by 2045—that ignores financial reality. I echo all the calls that have been made by speakers for reality.
So, let us talk about the reality of the North Sea oil and gas industry, which supports over 100,000 jobs and plays a critical role in our energy security. By the way, it is jobs that we should be focusing on in the Parliament—the creation of jobs, the protection of jobs, and the idea that it is good to work, which I think Willie Rennie covered really well in his speech.
Will Stephen Kerr recognise that the potential for creating jobs in Scotland when the oil and gas basin declines, as it is doing, is with renewable energy, which will also take us to net zero?
Please begin winding up, Mr Kerr.
That is the energy minister who just received a letter from the Just Transition Commission warning her that there will be no jobs for the 400 workers at the Grangemouth refinery in the foreseeable years to come. That is the nature of the transition. If it is going to be just, these issues need to be addressed.
It does not help when Labour burdens the oil and gas sector with further increases to the already high energy (oil and gas) profits levy, killing investment stone dead and risking thousands of jobs.
I understand that I must now wind up, so I will simply say that, although there are many issues that we have covered in this debate, we have to get to the root causes of why our country is where it is. It is time for leadership. The Scottish Conservatives will not apologise for advancing the argument for lower taxes, cheaper energy—I did not get to talk about nuclear energy, which I wish I had—and a Government that treats working people as more than easy targets for tax.
Scotland cannot afford more of this socialist same. It is time to stand up for the people of Scotland. Our party will do so and we will end the relentless attack on the finances of households and businesses.
15:58
In recent years, the UK’s “cost of living crisis” has become a well-used phrase. The danger is that we use the expression as a throwaway phrase, that we normalise it and that we accept the consequences that flow from it. It is not and should not be a throwaway phrase. Our Scottish Government has no intention of normalising the UK’s cost of living crisis. We will do all that we can to improve the lived experience of many families who are impacted by the cost of living pressures.
The Scottish Government is doing its bit—let me put that on the record. We spend £1.3 billion more on social security protections than we receive from the UK Government. We spend £6.9 billion in total, with £644 million for entitlements that struggling Scots can access but that are not available anywhere else in the UK. When families in Scotland—many of whom are working households—claim universal credit, they really struggle. The benefit is not fit for purpose. That is why the Scottish Government has invested £470 million in the Scottish child payment this year, putting money into the pockets of families of 333,000 children and keeping 60,000 children out of poverty.
Many other Scottish Government measures are often completely overlooked due to the heft and impact of their big brother, the Scottish child payment. I will mention two that make a real difference at the root of the problem: best start foods and the best start grant, which provide food and provisions at a key time in the lives of young children and families. In the round, that has prevented 100,000 children from falling into poverty. That is real action on cost of living pressures.
How does that connect to cost of living pressures? Let us be frank. It means that families can buy a bit more food when they go to the supermarket, despite soaring prices. It means that they have a better chance of heating their homes, despite rising energy prices under the UK Labour Government. That is the impact that our constituents want to see.
However, that is where the credibility of Labour is quickly shredded. As the Scottish Government is putting money into the pockets of Scottish families, the UK Labour Government is cutting holes in those same pockets. That applies to those who will lose their jobs due to the rise in employer national insurance contributions—which is a jobs tax—and to those who will see, due to Labour action, their incomes slashed and cost of living pressures like never before.
Where people lose their jobs, they will enter the world of social security entitlements, which they might not have had to use before. I say to people who are questioning whether we should provide all those measures that that social protection will be there for those workers if—or when—they unfortunately lose their jobs due to Labour’s jobs tax.
The UK Labour Government is also dipping the pockets of 900,000 Scottish pensioners. That will not help pensioners to get their messages in or pay their fuel bills. That leaves it to the SNP to restore a universal winter fuel payment that was robbed from Scottish pensioners, which will return to Scotland next year. Everyone will get a guaranteed £100, and the amount will increase to £200 or £300, depending on income levels.
Labour is discovering that being in Government is challenging, which I appreciate. It might find that it is better to cope with those challenges by having underlying principles and sticking to them when in Government. When we lose our underlying principles, we have nothing.
Labour is still insisting that it will lower energy bills by £300, but since it came to power, there have been energy price rises of £149 per year in October, £21 per year in January and another £111 per year from April this year. Labour appears to be in denial. Indeed, it is still putting out leaflets that claim that it is making pensioners £400 better off by lowering energy bills. Labour is in denial; potentially, it is deliberately trying to hoodwink voters in forthcoming by-elections in Glasgow, where those leaflets still circulate today, which is shameless.
In the time that I have left, I want to say a little bit about getting people into work. I agree with others that that should be preferably full-time work and work that pays. We sometimes forget about the early groundwork that the Scottish Government did. For example, take the family nurse partnerships, whereby nurses work with young mums. They put in intensive support, which allows those mums to be economically active and contribute to society, despite their challenges. That on-going good work makes a difference.
We are building on our childcare commitments in relation to breakfast clubs and after-school care. There is a call to be hugely flexible in relation to such provision, because sometimes the issue is not unemployment but underemployment, and flexibility in childcare is absolutely key.
I want to comment on getting back into work people who are on benefits and who are not seeking work due to their disabilities or their underlying health conditions. I note that the position some time ago—I think that it was in the 1980s, under a Conservative Government—was that if someone felt able to work despite all of their challenges but then, for whatever reason, that work broke down, because, for example, they were made redundant, they lost their job or they just could not cope with their underlying health issues, they were put back on to their underlying benefit, no questions asked.
The problem with the Labour UK Government is that it is not encouraging people with disabilities into work; it is forcing, compelling and sanctioning people into work. That is not the way to do it. It is not the Scottish way, and I will have no part in it.
16:05
It is stating the obvious to say that energy prices are high in the UK right now. This month’s energy price cap rise will mean an increase of around £9 per month for a typical household over the next three months. Liz Smith and a number of other speakers in the debate have talked about the reasons for that being well beyond the control of either the Scottish or the UK Government. A perfect storm of factors has driven up the price of gas since the start of 2025, and it has pushed British energy bills up with it. Because of the war in Ukraine, the pipeline delivering Russian gas to European countries through Ukraine was switched off at the start of the year.
Mr Griffin says that those issues are beyond the control of the Scottish Government, and I agree. However, when it comes to prices, it is not beyond the realm of possibility for the Labour UK Government to change energy prices and to decouple energy prices from international gas prices. Why does the Labour Government not consider doing that?
I am not sure whether Kevin Stewart was listening to the points that I made. I was talking about the reasons for the price rises being outwith the control of the Scottish and UK Governments, as they are an impact of the war in Ukraine and the shutting down of the gas pipeline through Ukraine from Russia to Europe. I was talking about the fact that the factors that are affecting the price of gas and energy bills are outwith the control of both Governments.
Will the member take another intervention?
Sorry—I will make some progress rather than address the member’s question. However, I agree with the point behind his intervention; he can listen to me respond to it or we can carry on this conversation later.
There is clearly an issue with the linking of gas and electricity. In particular, it is harmful to switch from gas heating to electric heating; when people switch to heat pumps, solar power or other forms of heating, it causes problems, and the Government should look at and address that.
Wholesale gas prices are around 15 per cent higher than they were in the period under the previous price cap. That situation has been made worse by the choices of the previous Conservative Government. Britain is now more reliant on gas than almost all our European neighbours, so that increase in wholesale gas prices has a bigger impact on us as consumers and businesses.
As the motion says, that has helped to contribute to the cost of living crisis faced by those who are most vulnerable. Following Liz Truss’s disastrous mini-budget, the annual rate of inflation peaked at 11.1 per cent in October 2022, which is a 41-year high. Over the three years between May 2021 and May 2024, food prices rose by 30.6 per cent. It had previously taken more than 13 years—from January 2008 to May 2021—for average food prices to rise by the same amount. Low-income households across the UK were hit hardest by those rising prices. Data from the Office for National Statistics shows that households with the lowest income experienced a higher-than-average inflation rate. That disparity is due to low-income households being more deeply affected by those rising costs.
Is Mark Griffin not at all concerned about the widespread views expressed by business groups and industry bodies that we are about to see massive increases in unemployment, especially among young people, because of the consequences of Labour’s first budget last October, with its increase in taxes and costs on businesses and the national insurance increase? Does he not recognise that every Labour Government increases unemployment?
I can give you the time back for both interventions, Mr Griffin.
Mr Kerr might want to reflect on the records of previous Labour Governments, particularly that of the Labour Government that took office in 1997, which slashed unemployment and fixed the Conservatives’ mess. The UK Labour Government has had to increase the burden on UK companies because of the mess in which we have found ourselves as a result of Liz Truss and the failures of a series of UK Conservative Prime Ministers. We have had to fix that mess, which is the reason why the burden on UK companies has increased. However, we are still listening carefully to businesses that have been affected, and we will try to work with them.
The budget that the motion praises is possible only because of the record investment for Scotland that the UK Labour Government delivered. The largest block grant in the history of devolution resulted in an additional £5.2 billion for the Scottish Government. That came about as a result of those tax decisions, and it has meant that the Scottish Government has been able to invest money in reducing the impact on families of the cost of living through proposals on the winter fuel allowance, which we proposed long before the SNP decided to include them in its budget.
Labour’s interventions in the energy market will mean that we will no longer be so vulnerable to international shocks to energy prices and that, as a country, we will be able to bring down bills for households and businesses for good. Labour’s work to deliver a record budget settlement for the Scottish Government and help half a million Scots with fuel payments demonstrates the difference that a Labour Government, with a new direction in Scotland, can make.
16:12
This debate is about the issues that affect our constituents the most, not just at this time but over many decades. The scenarios that those we serve face right now are not only the consequence of recent months and years or of one party’s time in government; they have built up over decades.
I have seen the root causes take shape during my lifetime. Over the past 40 years, the Conservative Party has been in power at Westminster more than any other party, so, when Conservative colleagues apportion blame elsewhere, they are not taking responsibility. The Labour Party has missed opportunities—it has done some things well, but, in my view, it could have done some things better. The Liberal Democrats were in a coalition Government at the turn of the crash. The Scottish Government—whether the SNP or the SNP and the Greens—has used its powers to best effect, but, on reflection, would we have tried to do some things in a slightly different way? Yes, we would. The reason why I apportion blame collectively is that this is our collective scenario, and it is our collective responsibility to serve and improve.
As the Financial Times noted not so long ago, Britain has become a poor country with some very rich people. How have we ended up there? We have ended up there by allowing the rewards of work to deplete and the cost of living to rise, principally, in two areas: housing and energy.
For 80 years between the 1910s and the 1990s, average house prices in the UK were roughly four times the average earnings. That was a fixed characteristic of British society. If people knuckled down and saved for a few years, they could buy a house in their late 20s—simple. In the space of a decade, that ratio doubled. The previous time the ratio was this high, cars had not been invented, Queen Victoria was on the throne and home ownership was the preserve of a wealthy minority. We are heading to that position again.
Before the member moves on from housing, does he agree that one of the things that has turbocharged the change towards ever more unaffordable housing is that a great deal of housing has been transferred into the private rented sector and is simply seen as a cash cow by those who own excess property? They own more property than they need, which has massively increased the unaffordability of housing for the rest.
Inflation and its causes are, absolutely, now part of a picture in which some people can access credit and amass assets, and others do not stand a hope, even in their mid-life, of getting into a position of being able to own an asset. That presents us with the challenge of rents, which we are wrestling with as a Parliament. How do we continue to build houses but also address the fact that rents are continually, year on year, taking up a higher percentage of people’s incomes?
It is not just a matter of supply and demand. As a culture we have reached a position in which house prices and costs are expected to rise, and we need to get to a position of stabilisation, which is a difficult place to land. Given that situation, how do we use devolved power—because that is all that we have—and push for more power to alleviate costs and support people?
There have been bold and collective initiatives—
Ben Macpherson is making a characteristically interesting and thoughtful speech. He said that devolved power is all that we have, but does he see the power of partnership between the UK Government and the Scottish Government on many of the issues that I raised in my speech, not least through some of the innovations to bring down bills and through GB Energy?
I see the power of partnership, but I am continually disappointed that UK Governments, particularly given the UK Treasury’s extraordinary power, do not take bold action to address the inequalities in the housing and energy markets. The Scottish Government is often left to pick up the pieces, for example, in social security.
We have talked a lot about social security as it relates to income support. The Scottish child payment, and other benefits that have been mentioned, have made a massive impact. However, a real problem is that public discourse has led us to a place in which disability benefits are considered an area that savings need to be made in. A lot of people are on disability benefits, but, because of the pressure that has been applied to them through austerity, demand is growing, not through the fault of those people but because of the conditions that have been manifested by political decisions—mostly taken at Westminster—over the past decade, as well as a result of international factors.
The disability benefits that the Scottish Government provides are intended to give people support for their conditions; they are not linked to work. There is another debate to be had about universal credit, which is failing. On Friday, I had a constituent at my surgery who had worked all his life and had paid into the system—I hear that from people again and again. He worked in manual labour and had hurt his hand, so he went to claim universal credit for support to pay his rent. Do you know what they said to him? They said, “You have another hand that works, so you can’t get universal credit.”
If we want to fix welfare, let us fix universal credit, and let us support those with disabilities and create a system in which people get the support that they require when they need it. Only then can we make the case that work always pays. Work does not pay enough; it is not linked well enough to economic growth. When we had economic growth, we did not have fair distribution, and we did not have high enough wages during the 1990s and 2000s.
I do not buy the idea that disability benefits are fair game. Disabled people need our help, and if we want to make savings, we need to look elsewhere. We need to raise money from the very few rich people in our unfortunately poor country, the UK.
16:19
The debate has taken place in the shadow of continued sustained pressures on the finances of all those who live in Scotland. The cost of living crisis, which we first had to contend with under a Tory Government, has continued with the newly elected Labour Government. The optimism that came with removing the Tories after 14 years of failure has quickly been replaced by a realisation that, those in power at Westminster, no matter what colour of rosette they are wearing, represent a harmful austerity agenda and seemingly endless cost of living crises for the people of Scotland.
I have no doubt that every member who is in the chamber today hears weekly the concerns of constituents who are struggling to make ends meet. Just yesterday, I met representatives from Hope 2 Help, which is a Coatbridge-based voluntary organisation. In the past 12 months, it has helped residents from across my constituency to access approximately £4.6 million-worth of benefits—that is money going back into the local area. The people whom that hard-working organisation helps are feeling stretched and are unsure what their financial future holds. The organisation, like so many others, is also feeling the strain, having just been rejected for grant funding from North Lanarkshire Council.
During the UK general election campaign last year, we heard a lot of promises. Last summer, we heard that Labour would cut energy bills by £300, but the energy price cap is about to rise for the third time, bringing the total increase to nearly £300. We live in one of the most energy-rich regions of Europe yet, under the UK Government, we are also paying some of the highest electricity costs in Europe—the word “ironic” does not even begin to cover it.
Last summer, Anas Sarwar promised voters that Labour MPs would scrap the two-child cap; instead, they voted to keep it, choosing to keep thousands of Scottish children in poverty. The budget that the Parliament recently passed was once again required to take mitigatory measures to shield those who are most vulnerable from economically punitive Westminster policies.
Last summer, we were told by Labour that our pensioners would be supported and that no austerity would be introduced. Instead, the winter fuel payment was scrapped in record time as soon as Labour took power. That move goes further than even the Tories went, and it has impacted nearly 1 million people in Scotland. I say to my Labour colleagues that it has not gone down well at all, with many constituents telling me in the days and weeks that followed the decision that, first, they could not quite believe the level of betrayal and, secondly, that they were very much regretting their vote. I think that Labour members know that to be the case. Of course, again, the Scottish Government has stepped up to the plate and has, yet again, mitigated that unfair policy with the pension age winter heating payment.
Some pensioners have also been affected by the Labour UK Government’s decision to reject the independent recommendation on compensation for the women against state pension inequality—the WASPI women. We now know that almost a third of a million women in Scotland might have been affected by the Department for Work and Pensions error that meant that they were not notified of changes that concerned them. Labour backed the WASPI campaign, promised justice and supported campaigners but, again, as soon as the Labour Government attained office, the campaigners and those affected were simply left behind.
Bill payers, parents and pensioners have been negatively affected since Labour took office, but do not worry, Presiding Officer: business owners have not been left out or ignored. Although Labour came to power on the promise of no tax rises for working people, its decision to hike employer national insurance contributions has forced businesses to face impossible choices between cutting jobs, reducing hours, cutting wages, absorbing the costs or passing some of the burden to consumers in the form of higher prices. The Scottish Government estimates that the increase will cost businesses £850 per employee.
I have been trying to ascertain something from SNP members for some time. They have £5.2 billion extra for the Scottish budget as a result of the budgetary decisions that the UK Government has taken, but they do not support a single measure in the UK budget. What would Fulton MacGregor have done differently if it was not to be the national insurance increase?
What I do not support is the hike in national insurance. As my colleague Willie Coffey pointed out to Paul O’Kane, it is our money—we are not getting any favours from the UK Government. It is our money, and it is only a fraction of what we should be getting.
I urge Labour to reconsider its decision on national insurance, which has the potential to cause serious lasting damage to Scotland’s economy. Just today, I heard from the general manager at Clarke Fire Protection Products in Coatbridge, which is a very good business. She confirmed that the measures have affected her company’s pay reviews. She told me that the bottom line is that there is simply not as much money in the pot to share with employees—again, it is workers who are paying the price.
I have mentioned the list of failures that people across Scotland have seen in less than a year, but one of Labour’s most damaging legacies is the private finance initiative, or PFI. Although those contracts were introduced under the Tories in the 1990s, they continued under successive Labour Governments and were discontinued only in 2018. Media reports now indicate that the chancellor is considering reintroducing them, so it is worth remembering the financial black hole that PFI contracts have inflicted on councils.
Last month, Labour-run North Lanarkshire Council set its budget for the year ahead and agreed on a 10 per cent increase in council tax. However, a huge proportion of council taxes go towards paying for those PFI contracts. In North Lanarkshire next year, more than £31 million—which is more than a quarter of the total amount of council tax that the council expects to receive—will be spent on PFIs. That figure represents only one year of paying for PFI contracts, which shows that the total amount of money spent on those contracts since their introduction is truly astronomical. Ultimately, North Lanarkshire Council will pay back £729 million for schools that had build costs of just a fraction of that amount. Two of those are in my constituency: the joint campus schools of Bargeddie and St Kevin’s and of Our Lady and St Joseph’s and Glenboig. Incredibly, North Lanarkshire Council is already having to build new schools for St Kevin’s and Glenboig, although they opened less than 20 years ago. Thankfully, in 2007, the incoming SNP Government put a stop to any new PFI contracts in Scotland or the situation would be even more bleak.
I appreciate that I must close. We heard a lot of promises during the UK general election campaign last year but, in record time, we have seen that those promises were worth very little when Labour had the power to act on them. The mitigating steps that the Scottish Government has taken once again underline the need for Scotland to have total control over its own policies and finances and we all know that the only way to do that is through independence.
We move to the winding-up speeches.
16:26
A number of members have focused clearly on the impact that the issues that we are debating have had on their constituents, and a number, from a range of political perspectives, have done their best to place this debate in a wider global context. I will single out Ben Macpherson’s speech, which most successfully combined the global context with the long-term, multidecade context that some of the pressures have come from while focusing clearly on the practical impact of those issues on our constituents.
Part of the global context comes from the multiple threats that are posed at the moment by authoritarian regimes such as those of Trump and Putin. That threat goes beyond any specific measures that they may take, such as kicking off a trade war, harmful though that clearly will be and destructive and unnecessary though it is. The threat is to do with the fact that they, and the billionaire class that they serve, are now pretty open that they regard the continued plundering of the world’s resources as being fundamentally incompatible with democracy. I have believed that for a long time, but the super-rich who want to continue that plunder are now having to face up to it, and they will choose plunder rather than democracy on every occasion. That is the scale of the threat that we are facing. If we want to have even a decent chance of democracy surviving and want to give people a reason to believe in it, a fair redistribution of wealth is urgently needed.
The climate emergency is another part of the global context for our debates. Everyone who has spent even five minutes understanding the science will get the very clear need to end our reliance on fossil fuels. The cost of living crisis of recent years was sparked off by a fossil fuel crisis when Russia’s invasion of Ukraine forced this country and other European countries to recognise and acknowledge their overreliance on fossil fuels. That is true not only for the countries that imported gas directly by pipeline from Russia, because that wholesale market set the prices even for those who produce gas domestically. The invasion of Ukraine impacted the fossil fuel economy for everyone, including people in this country.
There is no reason to sustain or continue the artificial link between gas prices and electricity prices in the UK, which several members have referred to. It is an entirely artificial construct of the way in which the energy market is regulated in the UK, and even those who switch to renewable electricity—which is the cheapest form of energy to generate—do not get the benefit of that cheap generation in the bills that they pay.
As for those who recognise that we are behind where we should be and that we are running behind schedule on climate, but who think that the response should be to slow down action, that is simply at odds with reality. When we are running behind schedule, the only rational response is to speed up. Yes, it must be a just transition, and, no, so far it has not been. The overwhelming reason for that is that far too much power is in the hands of the private sector and the billionaire class—the kind of people who run industries for their own benefit and stash the proceeds in tax havens. There was a campaign that used the slogan “Take back control” just a few years ago. I wish to goodness that we had Governments in this country that were willing to take back control from the billionaires, because that would be far more successful in achieving benefit for the public and for the standard of living of most people than the actions that have been taken.
Several members have talked about the potential for co-operation that exists. There is, I hope, potential for co-operation between the Scottish and UK Governments. The issue of energy pricing, which I will come back to, is one of the really positive areas where the opportunity could be there if both Governments seize it. If the UK Government changes the approach to regulating energy prices and the Scottish Government accelerates the transition away from fossil fuels for both heat and transport, we will have a win-win situation. Those who have supported making that transition will find that it is cheaper to do so, and Governments will find it more possible to provide support with that.
I want to unpack some other issues a little further. On the subject of rent, I mentioned Ben Macpherson’s speech, and he was quite right to say that the issue is about the long-term increase in housing costs. That has gone on for decades. Any one of us can go online right now and find out about it. I can look at the price that the flat that I live in would sell for today and find out what a mortgage would cost, and I can compare that with what it would cost to rent that self-same flat. People who are forced to rent their home in the private rented sector are paying significantly more for less. They do not get full control of the property, nor do they get the uplift in the property value over time, yet they are paying back the private debt of the landlord, who is able to service a repayment mortgage—not just an interest mortgage—by exploitative and extractive levels of rent. That is the rent that people are being forced to pay in communities up and down the country. That should end, and the Government’s desire to connect rent control areas to above-inflation rent increases will entirely defeat the purposes of that initiative.
I could say a great deal more, but I will end by asking the cabinet secretary to explain, in closing, where the heat in buildings bill is. What has been happening to it since November, when it was supposed to be introduced, and when we will see it?
16:33
This has been a really important debate on how we can best help the people of Scotland with their bills, but we need to ensure that every Government is doing the maximum that it can to impact on those bills. As Paul O’Kane, Foysol Choudhury and my colleague Mark Griffin said, the SNP Government can blame the UK Government all it wants, but there are many powers that it could use to make tangible differences to the cost of living crisis, and it has been in power for 18 years.
Meanwhile, Labour has been in power for just over eight months, and we are starting to make a difference. The comprehensive review of Ofgem is empowering it to facilitate growth and innovation and to become a stronger champion.
Will the member take an intervention?
I am responding to the debate. I heard Ben Macpherson’s speech, and I might come back to it.
The review of Ofgem is encouraging it to champion our consumers. There is also a focus on community renewables and community benefits, and on enabling renewables in England.
Other critical issues that Labour has pursued include increasing the state pension rate, retaining the triple lock and increasing the living wage. We have also had this week’s announcement about the Planning and Infrastructure Bill, which will enable households that are experiencing the effects of new or upgraded energy transmission infrastructure to get discounts on their bills. Those are practical measures.
I want to finish on this one.
Will Sarah Boyack take an intervention?
No.
We are capping the amount that can be deducted from universal credit payments while people repay short-term loans and debts, which will save 1.2 million of the poorest families in the UK an average of £420 a year. The Labour Government is taking targeted measures in the energy sector and to support households.
More than half of Scottish homes do not meet energy efficiency standards and are below recommended levels. Energy and heat are being wasted, which pushes people’s bills up—they are paying for heat that they should not have to pay for. We should better insulate our homes and use renewable energy solutions such as solar or heat pumps, which would impact on people’s bills. The Scottish Government has the power to do that.
Insulating homes should be at the heart of tackling the issue. The warm homes scheme had delivered only just over 14,000 installations by the end of 2023-24, yet 861,000 households are deemed to be in fuel poverty. Way more could be done. Could legislation fix that?
Will Sarah Boyack take an intervention?
No—I am about to respond to Patrick Harvie’s points.
On 8 March, it was a year since the consultation on the heat in buildings bill closed, but the bill has still not been published. It would be good to get a timescale for that, as well as for the energy strategy and just transition plan.
We need action and investment. However, this year, despite getting £5.2 billion extra, the SNP cut the energy efficiency and decarbonisation budget by just under 5 per cent in real terms. There was the £47 million that could have been used to create jobs in our communities. Willie Rennie talked about jobs. Last week was apprenticeship week. That was a massive missed opportunity to give people in our communities jobs and make people’s homes energy efficient. That is underperformance.
Will Sarah Boyack give way on that point?
No. As I said, I am responding to the debate.
I will move on to respond to the speech of the cabinet secretary, who opened the debate. There was lots of talk about what could be done. For example, there was talk about housing. Way more could be done on housing. We saw that in the UK budget—£3.1 billion is to be spent on affordable housing. I refer members to my entry in the register of members’ interests. There has been nothing like the action that is needed to tackle the housing emergency that we now have in Scotland or to create more affordable social housing and address the issue of thousands of empty homes.
Does Sarah Boyack not recognise that the investment that has been made in affordable housing over many years in Scotland dwarfs the investment that has been made in England by the UK Government, including the figure that she has just cited?
My point is that you have had 14 years of a Tory Government.
Speak through the chair.
In Labour’s first budget, that investment was prioritised for affordable social housing, yet, in Scotland, there is an affordable housing crisis.
The cabinet secretary also talked about free bus travel. I introduced it for the over-60s, and we also have it for the under-22s. That is fantastic but, as we have said before, if there is no bus, it is not much use. We are seeing a loss of affordable buses.
Several colleagues have talked about the millions of journeys that our constituents were able to make when peak rail fares were abolished. Now, however, they have been reintroduced, so many people will not be able to afford the train.
Therefore, we have a problem, which is about energy, people’s homes and what more could be done. I say to colleagues that the Labour Government is now interested in both short-term and long-term solutions to the problems that the people of Scotland face.
In his opening remarks, Paul O’Kane mentioned the fact that the £150 warm home discount scheme, which will provide help to an extra 220,000 households across Scotland, comes on top of the £41 million of funding for the 2024 winter that has just passed, which has given vital assistance to our constituents.
We are also investing in the long term. There is investment in the grid and in ensuring that we have sustainable, cheaper energy, and there is a longer-term approach to ensuring that we get the investment that we need for base-load and renewables. Long-term and short-term solutions are critical.
One point that has not been mentioned by most members is renewable heating solutions. We have so many opportunities in Scotland. One thing that has struck me in today’s discussion is the fact that we need to focus on what can actually happen, and we need to make sure that that links to people’s bills. For Scotland to remain a leading figure in the transition to net zero, we need to react to the rising cost of living pressures, but we also need to do the heavy lifting and make sure that we see benefits for our constituents to experience.
This is a debate about energy bills and the cost of living crisis, and we need to look at what more the SNP Government can do now, rather than grandstanding and blaming the UK Government when it is actually getting to work in those areas. We do not need warm words; we need action. The people of Scotland deserve better. Let us see it.
I advise the chamber that we have exhausted all the time in hand.
With that, I call Douglas Lumsden for up to eight minutes, please.
16:41
Thank you, Presiding Officer—that was perhaps a warning.
This has been an interesting, if somewhat predictable, debate. The motion from the Government is a shameful attempt to deflect all responsibility away from it. Let us remember that we are seeing inflation-busting council tax rises because of its financial mismanagement. Of course, we also have the Government’s usual attempt to pat itself on the back in the motion.
Then we have Labour’s amendment, which makes me think that it is living on a different planet. It is as if its string of broken promises over the past six months should just be brushed aside, which is a point that Stephen Kerr made. No wonder Labour members were too ashamed to take interventions.
In the run-up to the general election, Labour promised change. However, I do not think that our pensioners were expecting change to mean their winter fuel payments being snatched from them a couple of months after Labour came in. I do not think that our farmers were expecting change to mean a family farm tax that would see many have to sell parts of their business to survive. I do not think that businesses thought that change would be a tax on jobs as national insurance was hiked. I do not think that households were expecting the promise of lower energy bills—by £300 a year, by the end of the Parliament—to actually mean bills going up. However, that is exactly what we have.
I have spoken regularly of GB Energy being a sham. We were promised lower bills, but bills are rising. Aberdeen was promised 1,000 jobs, but now we are being told that there might be 200 jobs by 2029 if we are lucky. Only last week, it was reported that the Treasury was lining up spending cuts to GB Energy, which is a point that was made by Graham Simpson. To be honest, I am not surprised, because Treasury officials, like the rest of us, are probably totally confused as to what GB Energy actually is. No wonder it seems to be struggling to hire a chief executive; it probably cannot agree on a job description.
Although I am not averse to the devolved Government pointing out the failings of the Westminster Labour Government, it cannot pull the wool over the eyes of the Scottish public when it comes to its own failings. Pointing the finger at someone else does not absolve it of the guilt of failed policies and abandoned communities, such as the north-east. We are still waiting for a just transition plan and an energy strategy from the Government. We are still waiting for it to meet its environmental targets and for it to tell us how it will meet our long-term energy needs without being reliant on imported oil and gas.
As much of a farce as GB Energy is, at least the Labour Government has actually set it up. Although I am not sure what it is, unlike the state-owned Scottish energy company, it is set up. That company was announced by the Scottish National Party in 2017, but is now not spoken about and seems to have been quietly ditched. There was also the Scottish Government’s bonds, which Humza Yousaf announced in this place—another grand announcement quietly dropped in the hope that no one was looking.
This is a Government that is out of ideas and out of time. It needs to focus on the basics and on growing the economy. As Liz Smith said, we get criticised for being obsessed with economic growth but we are right to bang on about it. It is essential because it leads to more jobs, more money for our public services, better education, more opportunities and lower poverty. It should be at the heart of everything that this devolved Government does, because, without it, we are in a downward spiral. Without growth, this devolved Government has backed itself into a corner of higher taxes, lower productivity and less money for public services. We need to break that cycle. That is why it is criminal that the Scottish Government is turning its back on well-paid jobs and tax revenues through its demonising of the oil and gas sector.
Paul O’Kane spoke of energy security, but the Labour UK Government is forcing through a ban without a plan, through its policy of no new licences, and the devolved Scottish Government has adopted a presumption against new oil and gas exploration. While we still have a need for hydrocarbons, why on earth would we shoot ourselves in the foot by not using our own domestic supply? That is not good for our jobs, our economy, our energy security or the environment.
I will now turn to the contributions that we have heard. The cabinet secretary spoke about getting existing housing back into use. I completely agree with that. Voids have been a problem for years, but those have been caused by the lack of local government funding. Those issues are linked. We often hear talk about how well local government is funded, but, if that is the case, why are we seeing inflation-busting council tax rises?
Patrick Harvie spoke about the proposed heat in buildings bill. He is right to say that we deserve to know what has happened to that bill. Has it been dropped? We need some honesty from the Government.
Fergus Ewing made an important contribution. Our power is too expensive, which means that our manufacturing base cannot be competitive—a point that Graham Simpson also made. Our highest industry energy costs could be pushed to consumers and so fuel inflation. However, I agree that the solution is not as easy as simply breaking the link between gas and electricity pricing. If that were the case, I am sure that it would have been done already.
Does Mr Lumsden also agree that, in the UK, there is sufficient storage capacity of gas for only seven bad winter days, as opposed to the capacity for 89 such days that exists in Germany? Without further investment in a UK gas industry, there would not be incentive to invest in increasing that gas storage, because there would be no purpose. Therefore, the risk of the lights going out in Britain is very serious.
I completely agree that we should invest more in gas. I would like to see a new gas-fired power station being built in Peterhead. Making that link to Acorn, which I am sure most of us would want to see happen, would be a good step forward.
Willie Rennie spoke about economic inactivity. Work is good, so let us help people who do not have it. He pointed to NHS waiting lists adding to the problem—a point that Paul O’Kane and Bob Doris made, too. Mr Rennie also pointed to the grants for home efficiency and heat pumps. All members will have heard the complaint that applying for those is difficult.
I tried a couple of times to intervene on Foysol Choudhury, to ask him when GB Energy would reduce bills by £300 and why pensioners would ever trust the Labour Party again. Perhaps it was a good thing that he did not take my intervention.
I have sat through the debate, wishing and hoping for some clarity from the Scottish Government on what solutions it is offering the people of Scotland. I should have known better. Instead, it has come to the debate with political grievance and point scoring.
Let me outline the policies of the only party in Scotland with commonsense proposals on the issues that have been discussed in the debate. Only Scottish Conservatives will cut income tax to 19 per cent for every taxpayer who earns up to £43,000 per year. Only we will exempt all pubs and restaurants from paying business rates. Only Scottish Conservatives will cut taxes for house buyers by raising the point at which they start paying tax on house purchases to £250,000. Only we will protect Scotland’s oil and gas sector and the vital role that it plays—and will continue to play—in providing affordable energy to our homes, communities and country for many years to come. Only Scottish Conservatives will put money back into people’s pockets, ensure a growing and vibrant economy, and stop those left-wing radical policies coming from a Scottish Government that is out of touch, out of ideas and out of time.
I call Gillian Martin to wind up the debate. Cabinet secretary, I would be grateful if you could take us up to just before 5 o’clock.
16:48
Gosh! I almost do not know where to start. I have just written something down. What would people say who have been watching the debate and are finding it difficult to pay their bills or feeling that their money is just not stretching as far as it should? What would they make of members’ contributions to the debate? Would they think that the Parliament is the sort of place where solutions can be arrived at—where we can get together in a room and come up with plans for working across the devolved Governments, including our own, and the UK Government? Could we work across the parties? What would be the ratio of solutions that members have suggested to the number of insults and point-scoring remarks that they have made?
Just as I was writing that, I was called a “left-wing radical”. I wonder what people would think of that? Douglas Lumsden does a good line in tabloid headlines, but for anybody who is sitting at home worrying about whether there is a plan, was there enough in what he, in particular, said, or in what the other members on the Conservative benches said to make people think, “Well, I’ll vote Conservative, because they’ve got a plan”? Would they also have confidence that he and I could sit down and thrash out our differences on energy policy and arrive at a point of being able to make meaningful change?
Maybe if this Government removed its presumption against new oil and gas we could work together.
The thing is, however, that “presumption against” is two words; I will not go into this too much, but behind our energy policy—as well as behind the energy policies of Labour, the Greens and the Lib Dems—there is more nuance than that and there is more discussion. It is not about just those two words; it is about what we do and how we support people. It is about the money that we put forward to support people. It is about the £500 million that this Government gives to people in the supply chain to help them to fill their order books with renewables as well as oil and gas. It is about the training programmes that we put in place for people to upskill so that they can take advantage of new jobs if they are worried that their company might be leaving the North Sea because it is not economical to produce there any more. It is about all those things.
Will the cabinet secretary take an intervention?
I will not, because I feel that it would just take us back to Victorian Britain, where people like me did not do terribly well.
I will set out my stall on some of the things that I think would make a genuine difference. There is no magic bullet—there must be a combination of things. Some members included ideas and reflections in their contributions. Fergus Ewing did that very much, as did Ben Macpherson.
Here are some of my reflections. Decoupling the cost of gas and electricity would be a start. The more renewable electricity we generate, the cheaper it will be, then, potentially, more people will make the decision to heat their homes with electricity or to drive an electric car—to change over to electricity. Companies might locate themselves here, so there would be high-intensity industries that would provide more jobs. As long as the cost is volatile and attached to gas—the geopolitical aspects of that were mentioned by Mark Griffin, among others—there is a false link and people cannot see any certainty. Those things are just for starters.
A social tariff for vulnerable customers would make a difference right now. If it was implemented within this financial year, it would be the biggest game changer for the vulnerable people who have racked up monumental debt that they will never be able to pay back and that is costing the utilities companies lots of money in trying to recover it. We have had good feedback from the utilities companies about the social tariff, we have had a working group that has been working on it for quite a long time, and we are producing a report, which I think was mentioned by Marie McNair. That report will be offered to the UK Government, because we have done the work to show how a social tariff could work, and lots of stakeholders across lots of sectors, including the utility companies, are backing it. It would make a significant difference to people who are in poverty.
On standing charges reform, at the moment, Scotland and North Wales pay the highest charges. The lowest standing charges are in the south-east of England and in London. The last time I looked, we were generating quite a lot of electricity in Scotland. We have been a bit of a powerhouse with regard to energy.
Will the cabinet secretary take an intervention?
I have already taken an intervention from Mr Lumsden, so I will not bother, thank you.
Standing charges are currently skewed to benefit the areas with the highest populations and with—let us face it—probably the most votes.
Does the cabinet secretary agree with zonal pricing?
I have left aside zonal pricing or variations on it, but I do not think that it is an either/or situation. What we cannot have is the status quo—I am absolutely convinced about that. However, I am yet to be convinced, having seen some of the proposals, that zonal pricing is the magic bullet that people say it is. The reason is that, although a number of different interventions can be made at one time, we do not want to put off investment in renewables in Scotland, which has been flagged up as a danger of zonal pricing. At the same time, I would want to ensure that the impact on consumers of zonal pricing would be significant enough for us to go down that road. I have heard that zonal pricing would lead to between £40 and £100 a year off electricity bills, and that is not enough—it would not make the required difference. I worry, therefore, that some of the arguments for zonal pricing are promising a bit too much.
Nevertheless, there is definitely something in there about rebalancing the types of markets that we have, and we certainly need to ensure that people in the parts of the country—across the four nations of the UK—that are generating fuel or transmitting electricity get a discount of some type. That is a pressing issue that is upsetting quite a lot of people.
I am sorry to sit on the fence on zonal pricing, but I need to understand an awful lot more about it and what the alternatives are. That is why I am laying out the options.
I also want to see significant community benefit interventions, which is perhaps more what Liz Smith’s intervention has led me to discuss. Communities that are hosting infrastructure and developments are not getting enough community benefit. I would like community benefit to include people having a stake in those developments and being helped to develop their own community energy schemes by companies that are working in their areas, and thereby seeing money coming right into their communities.
I am delighted to hear that the cabinet secretary supports communities having a stake. As I argued in the chamber last week, community ownership would provide benefits of a magnitude that would be massively greater than their simply getting a cheque. Would she work with the Labour Government on that? There must be a will to deliver that, and to do so quickly before any more projects are finalised with it not being even a possibility.
The answer is absolutely yes—more than that, I am already working with the UK Government on it. One of my first discussions with Michael Shanks on the matter concerned some of the funding that might come from GB Energy being put into our community and renewable energy scheme—for which demand is out the door—in order to increase the scheme’s capacity. I said to Michael Shanks, “Don’t reinvent the wheel—we’ve got a really good vehicle for this, and we have more people who actually want community energy.”
One of the great things about CARES that it has taken out much of the difficulty for communities in setting up their own community energy. Previously, a community almost had to have people who were experts in the area to be able to do that. I want more community energy and I want the procuring power of developers to be used. That procuring power is significant, so developers could, in effect, say, “Would you like a community energy scheme? We’ll build and fund it—it’s yours.” I think that, if that were to be the case, a lot of the difficulties would melt away.
Will the cabinet secretary give way?
I would like to take Willie Rennie’s intervention, but I will mention him instead. I enjoyed his speech—he talked about mental health, which made me think about how the level of debt that is associated with fuel poverty exacerbates poor mental health.
I also want to mention area-based schemes. In my discussions on the budget, I have protected the money that is going into area-based schemes and the warmer homes Scotland scheme. We have increased the money for area-based schemes because they are turning more houses, faster, into the energy-efficient homes that they should be. Again, however, demand is out the door. There is good progress in that area.
I will use my final 20 seconds to say something about the proposed heat in buildings bill, because I am going to be up front with members. I will introduce a heat in buildings bill when I can be satisfied that the interventions in it will decrease fuel poverty at the same time as they decarbonise houses. With the greatest respect to Patrick Harvie, I do not feel that the previous drafting that was done took that into consideration significantly. There are so many moving parts. I will craft a bill that will simultaneously reduce carbon and tackle fuel poverty. Until I can do that, I am afraid that the bill will not be introduced in its form as previously drafted, because it would make people—
You must conclude.
That concludes the debate on supporting households with cost of living pressures and rising energy bills.
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