Seòmar agus comataidhean

The principal source of advice for energy efficiency and energy issues in Scotland that the Scottish Government supports is Home Energy Scotland. It provides advice and guidance, as well as loans for certain programmes around energy efficiency and renewable energy schemes for people’s properties. It is the principal source of advice and information for assistance in Scotland. Alongside that, we have the warmer homes Scotland programme, which is taken forward in partnership with our colleagues in local government.

At present, there is an increasing demand for information on energy efficiency programmes and advice around heating bills. That is why we have increased the scope of the Home Energy Scotland programme by 20 per cent. There is also a bespoke programme for the most vulnerable people, which has been doubled in size to help support the provision of advice and information.

There is a clear existing arrangement for people to get impartial advice and information. However, I am always willing to look at whether there are ways to improve that arrangement or whether we should further expand it. If there are specific examples of people being left confused or unclear about where they should go to, we can look at how we ensure that we are communicating much more effectively. As I said, there is a bespoke service to which people can turn for advice and information.

Why would a developer build a wind farm pre-2030 if National Grid said that it could not be connected until 2035?

If National Grid provides the capacity, including the planning capacity, for all the projects to be delivered by 2030, that is when the generation will happen by. If National Grid does not provide the capacity by then, the projects will not be able to be connected by that point. You do not build a wind farm without a connection.

You are right to say that tackling fuel poverty is a devolved matter, but many of the factors that influence it are reserved—

Yes, I do, and it was a positive move to start doing it every two years rather than every year. CFD is not specific to the UK. The Netherlands, Germany and some other countries all use CFD processes. It is not, therefore, unique to the UK. It is a mechanism that helps to get things to the market.

The point that I was making about hydro, however, was that there is no mechanism for hydro. If you wanted to build Cruachan 2 today, you would not have a route to market because BEIS has to create such a mechanism. There are projects that could be developed and go forward with billions of pounds of investment to produce several gigawatts of capacity and create thousands of jobs, but they are waiting for a mechanism to be created that will allow them to start moving.

That is frustrating, if we are clear—and I believe that the UK Government is clear—that we will have to deal with the energy crisis in the long term by decarbonising our energy system and putting a greater focus on renewables. The UK energy secretary said that and I completely agree with him. However, when your renewables projects are quite literally fossilising because they cannot get a route to market, there is something wrong. That is why we have been raising the issue with the UK Government. Those projects could create energy capacity, renewable capacity, jobs and economic benefit, and we should be getting on with them now. That is the kind of action that needs to be accelerated.

In January, my colleague Shona Robison and I wrote a letter to the UK Government in which we proposed a four-nations approach to tackling the increasing cost of living crisis. I, along with Kate Forbes, wrote again in March, again looking for a four-nations approach to these matters. To date, the UK Government has not taken up that offer.

There is a lot in that, and I will unpick some of it. I disagree with the wait-and-see approach. Customers on direct debits saw an £693 increase in their default tariff and pre-payment customers saw a £708 increase in their default tariff. We do not have to wait to see what to do, because people are already experiencing significant financial challenge. That is why I do not agree with the UK Government’s wait-and-see approach. The measures that have been taken do not go far enough—we need to go much further.

Should we deal with it as a welfare issue or as an energy issue? It should be a combination of both, not one or the other. We need to make sure that we take action through the welfare provisions that are available, and reinstating the £20 uplift in universal credit would be a step in the right direction in addressing the crisis. That was introduced because of the pandemic but has been removed at the very peak—or potentially at the very peak—of a cost of living crisis, so that was the wrong thing to do.

We have sought to use the welfare powers that we have to help to manage the cost of living crisis that households face. For example, we have doubled the child payment and increased it by a further £5, and we have increased the eight benefits that we are responsible for by 6 per cent. We are trying to uplift them in line with the rise in the cost of living.

We are seeking to use the welfare powers that we have to help to meet some of those costs, but I recognise that that is not sufficient in itself. Action needs to be taken in the energy markets. Some of that will be short term and some of it will be medium term.

In the short term, Keith Anderson’s proposal on the deficit fund is one option that could be considered. There is a range of other things that we could do as well—for example, removing VAT and examining some of the social and environmental costs that are attached to energy bills could save households another £140 to £150 on their bills. There are other measures that could be removed.

There are aspects to energy that could be addressed in the short term. In the medium term, we need to keep in mind that energy bills are going up also because of failures in the market. Many retail companies have withdrawn from the energy market, which has resulted in costs being added to household bills to address those company failures. That says to me that there has been clear, systemic regulatory failure in the sector.

The companies broadly fall into two categories: those that are hedged and those that are unhedged. The ones that are largely left to the retail market are unhedged companies. They did not have a business plan or structure to be able to absorb big spikes in energy costs. They have withdrawn from the market and, because of the supplier of last resort arrangements, the costs have been transferred to other companies and socialised across the rest of our energy costs.

That indicates that there is a systemic failure in the sector. That needs to be addressed, but I am not convinced that the Office of Gas and Electricity Markets has yet set out actions that will address that in future. Ofgem needs to do more on that. I am more than happy to expand on and explore that aspect as well.

Given that many of the costs are directly attributable to the big spike in energy costs that are driven by wholesale gas prices, we need to speed up decarbonisation. I welcome the fact that the UK Government has also acknowledged that. The priority now needs to be moving towards renewables at a faster pace. That will give us energy security. Furthermore, as renewables are lower in cost, that will also help to drive down bills in the longer term.

It is not a case of doing one thing or the other; it must be a combination of the two. Where we can take action, we are trying to do so, but there is no doubt in my mind that much more needs to be done.

I do not accept that on the part of the Scottish Government, because we recognise that it is a crisis, and a considerable amount of cross-departmental work is already taking place across Government to address some of those issues. Our internal processes and mechanisms for dealing with the situation reflect that it is a crisis.

I accept that the level of intervention that has taken place so far has not reflected that it is a crisis. There is absolutely no doubt in my mind that a key priority must be either to reduce household bills or to get money into people’s pockets.

Given that the UK Government has cut benefits—it has removed the £20 a week universal credit uplift, for example—and it has increased national insurance, it feels as though it is not recognising the situation as a crisis. Its failure to take action in the recently published UK energy security strategy, in the March budget and in the Queen’s speech last week does not reflect what I believe is the necessary action that is required at UK level to tackle the spiralling crisis that households face as a result of the increase in energy costs.

We are doing what we can to martial our fixed resources in a way that provides assistance where we can, and we are looking internally to see where there is more that we could do. The UK Government needs to take a much more concerted crisis-type approach by intervening in the market or by providing financial support that would help to address the increasing costs that households face.

Thank you, convener, and good morning, everyone. The Scottish statutory instrument that you are considering is routine. It concerns the application of the Scotland-specific equalities duties to the new environmental governance body, Environmental Standards Scotland.

As ESS is established as a non-ministerial body—it is part of the Scottish Government Administration, albeit independent of ministers—it is automatically covered by the public sector equality duty in the Equality Act 2010 and there is no need for a separate order to add ESS to the scope of that duty.

The Equality Act 2010 (Specific Duties) (Scotland) Amendment Regulations 2022 will apply the Scotland-specific equality duties to Environmental Standards Scotland by adding it to the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012. Those will require ESS to publish equality outcomes and report on progress towards achieving those; report on the mainstreaming of equality; and publish information on the gender pay gap and equal pay. It is important that ESS is included in the full range of equality duties that are expected of Scottish public bodies.

Committee members will be aware that the Scotland-specific duties are currently under review and that a consultation is on-going on proposed changes to the 2012 regulations. However, it is not reasonable to delay the inclusion of ESS in those duties. ESS will be included with other public bodies in the scope of amendments to the 2012 regulations.

I hope that that provides a useful overview, and I am happy to respond to any questions that the committee may have on the matter.

Given that ScotRail is about to come into public ownership, it will be part of the Scottish Administration and will be covered by the 2010 act. The Minister for Transport is considering any further changes that we might make.