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Are you talking about fuel poverty in the Scottish Government?

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.

Thank you, convener. Good morning. Households across the country are struggling to cope with the cumulative pressures of the cost of living crisis, and energy costs lie at the heart of that crisis. Record-high inflation, which is in large part being driven by energy price increases, has forced thousands of people to choose between heating and eating and to experience the worst decline in living standards in the past few decades. The tragic events in Ukraine have exacerbated the already elevated fuel prices, which have risen to unprecedented levels, and the impacts are felt by domestic and business consumers in Scotland. We have also seen the standing charges in fuel bills double, which means that reducing consumption does not save as much as would have been the case previously.

Scotland is a forerunner in renewable energy generation and has the potential to expand our renewable capacity and reduce energy bills. However, investment is being held back due to unfair network charges, which is a missed opportunity in the current energy crisis. A significant number of Scottish households are off the mains gas grid and, due to the interconnected nature of the energy market, natural gas price increases have had a knock-on effect on electricity, heating oil and liquefied petroleum gas prices.

This year, the Scottish Government is set to invest almost £770 million in helping to tackle the cost of living pressures, which includes a £150 cost of living award to support households with higher energy costs, and there is a further investment of £10 million to continue our fuel insecurity fund. Crucially, we are also committed to investing at least £1.8 billion over the next five years in heating and insulating Scotland’s homes and buildings.

We have repeatedly called for urgent and targeted support from the UK Government in the immediate and longer term, such as: a one-off windfall tax on companies that are benefiting from significantly higher profits during the pandemic and energy crisis; direct financial support for low-income households; improvements to the warm homes discount scheme; and a temporary removal of VAT on energy bills.

Sadly, in the March budget, in the energy security strategy and, last week, in the Queen’s speech, the UK Government repeatedly failed to deliver anything to match the scale and urgency of what is required. However, we continue to engage with the UK Government on those matters. We are also engaging with stakeholders and the sector to explore what more we can do and how we can work on a four-nations basis to help to address what is a growing crisis for many households.

Convener, I am happy to respond to the committee’s questions.

I want to be clear—are you referring to the fact that there is additional capacity in the UK to produce gas, but the domestic price has not dropped to reflect that?

I am not aware of the £500 million that you are referring to, but if you can provide more information, I am more than happy to take the matter away and get clarification on it. As I have not been sighted on that, I would prefer to get some details on it and then clarify things with the finance secretary.

We still do not have clarity about the track 2 process for carbon capture, utilisation and storage. We have had extensive discussions with the UK Government about that, and it is rare that I do not raise the issue when I meet UK energy ministers. Their view is that the Scottish cluster has to be considered in track 2, but we do not have clarity on when that process will take place. However, the UK Government has recently said that it expects that it will require four CCUS projects to be in operation by 2030. The problem is that we do not know what the track 2 process will be for the other two projects that will be taken forward, and I would think that the Scottish cluster would be one of them. We need clarity on that timeline and a clear understanding of the timescale for decision making on track 2 to make sure that those projects can be delivered later this decade.

Again, because of the interconnected nature of the energy sector, wholesale gas prices are forcing up the price of LPG and oil gas heating. Our view is that there is a need for regulation in this sector, and we have raised that with the UK Government on a number of occasions. However, it is very clear that it has no plans to do so.

The sector is engaging with BEIS on what it can do to meet some of the spiralling costs that off-grid properties are now facing. Given the fact that 17 per cent of our population in Scotland is off-grid, it is an area that should have some regulation in order to manage some of the potential cost impacts that big price spikes can have on households. At about 12 per cent, the off-grid sector in England might not be as big, but it is still a sizeable percentage. There is a need for some market intervention, and there is a variety of different models that we could look at, but at the very least there should be some sort of engagement on different options for regulating the sector, given its impact on so many fuel-poor households in rural parts of Scotland.

If you can do so, I will ensure that we take the matter up with the finance secretary.

I do not believe that there should be a windfall tax only on energy companies; our view is that there should be a windfall tax on companies that have made a significant profit during the pandemic, including the oil and gas sector—in other words, the energy sector itself. That would expand the range of any windfall tax and, potentially, increase the pot available to the UK Government to create measures to address the cost of living crisis. I sense that the chancellor’s position on that changed during the weekend in a way that suggests that he is starting to think about the possibility of introducing a windfall tax on the energy sector.

Presently, we are not looking at an emergency budget. That is because we have a fixed budget, which means that we would not be able to draw in extra resource. We are looking at the present allocation of funding across different portfolios to see whether we can target more of it at people who are experiencing particular difficulty during the cost of living crisis. That work is being done now. However, given that we have a fixed budget, there are no plans for an emergency budget at the present time.

I cannot give you a figure off the top of my head for the number of civil servants who are involved in tackling fuel poverty, but I am more than happy to provide you with that information. Of course, many of them will be involved not just in fuel poverty but in wider social policy areas such as child poverty and household poverty. In other words, they will work not just on one specific bit of poverty but across a range of areas, because they are all interlinked. The households that are experiencing child poverty are often the same households that are experiencing fuel poverty, and those who are experiencing poverty in general often experience fuel poverty, too.

The danger in a governmental sense lies in taking a silo-thinking approach to this rather than a cross-departmental approach. However, I am more than happy to come back to you with the number of civil servants who are employed in tackling poverty, including fuel poverty.