 Rhaid curfodd o'r gwaith, yn cymdeithasol. Fy edrych yn y gyfathor sydd yn y 2015 fydd nesaf gan Gy poppings a IPA, yn cymdeithasol i gyffredinol. Mae hi i ddim yn digwydd ac mae hi wedi cyfle i gael myfyrwyr iawn i gael eraill yn gallu weithiau o'r ddigonol ac rwy'n gwybodaeth a lynyddo'r amlawn hyn sylw laser. Fy edrych ymchlwydd i ddim yn cyfan hynny i mwy adeutdol, roi hwn o'r gwneud hyn yn cymdeithasol i ddim yn eu cyfathorios taith i ddim yn cymdeithasol i ddim yn cynhyrchu ar gannig o booedd pobl yng Nghymru'r Pag metersigol, i weld fforddol ar gyfer gennym. Fyddon ni allwyr a'r gwnaeth i gwen фawr yn mynd i gael ei gael. Felly, i fod hyn yn gallu gweld ei gael, fel y fforddol, i fod mynd i'r gael yn fforddol. Rwy'n gwybod i ni'n dysgu wedi'u fforddol i'r golwstyr i'r bod yn gweithio chi. Felly, i fod yn gweithio chi i'n gweithio'r Fygofyr, i fod yn gweithio'r Gweithre Boed, i fod yn gweithio'r Fygofyrfer. Emma Jane Tooism, who is joined today by Fiona Heporth-White, who is policy adviser for Scottish Government, Jason Hubart, head of business development at Forestry Commission Scotland and Olive Hogg, sister in the Scottish Government. Welcome to you all. Minister, do you want to speak to the instrument, please? Thank you, convener, and good morning to everyone. I had got three pages here, which sets out the extraordinary success of the Scottish Government in promoting work through the Nurebulls Order, but since, convener, I have to be at New Battle Abbey by 10 o'clock to convene the opencast task force, at which I will submit your apologies, I will just stick to the order, if I may. The order implements policy decisions in relation to the reporting requirements and sustainability criteria for stations using solid biomass and biogas feedstocks to generate electricity. Reporting requirements on the use of solid and gaseous biomass under the RO were first introduced in Scotland in 2009 to ensure that biomass material is sourced responsibly and in a way which minimises and eliminates any adverse impacts. The requirements were enhanced in 211 and again in 214. The proposed amendments are designed to ensure that the legislation remains fit for purpose. We see no reason for divergence from the rest of the UK on biomass sustainability issues, and therefore the amendments mirror those being made to the RO mechanisms in England, Wales and Northern Ireland. This approach, convener, is favoured by industry. The first of the proposed changes relates to making compliance with biomass sustainability criteria mandatory in order to receive support. Under the RO Scotland, generators are required to submit information on the sustainability of their biomass fuels to Ofgem. This includes information regarding land use and greenhouse gas emissions. The committee will remember last year the approved amendment to the RO order, which introduced first tighter sustainability standards for electricity generated by solid biomass and second a new requirement for generating stations of one megawatt and above to provide an annual independent audit report. These changes were introduced on a reporting only basis to allow generators time to become familiar with what is required in practice. The current amending order would make compliance with the sustainability criteria mandatory. Generating stations of one megawatt and above, which use solid biomass and biogas, will be required to report and meet the sustainability criteria in order to claim rocks. The second change relates to greenhouse gas emissions targets. Operators are required to account for the lifecycle of greenhouse gas emissions for the biomass used to generate electricity. To ensure that biomass power delivers genuine greenhouse gas savings and to promote good practice and innovation across the supply chain, we are introducing a tightening greenhouse gas emissions target. Biomass power is already required to meet the greenhouse gas savings target of at least 60 per cent compared with the EU fossil fuel average, and that target becomes tighter in 2020 and 2025. The tightening greenhouse gas emissions targets will be applied as an annual average to allow generators to better manage procurement risks. That is subject to the provision that a consignment of biomass must not exceed an overall ceiling to ensure that each consignment delivers a good level of savings. Finally, we are making a number of technical adjustments to the reporting requirements and sustainability criteria. The minor adjustments and clarifications have been identified as areas that will help to ensure the effective operation of the scheme and lead to more accurate reporting by operators. OfChem will continue to regulate compliance with the mandatory sustainability criteria. To sum up, convener, those changes will improve the efficiency and sustainability of the arrow and ensure that legislation remains fit for purpose. Before I formally move the motion recommending the order, I will be happy to respond to any questions that members may have. I hope that the minister will not break any speed limits on your way to new battle, Abbey. You tried your best to break them, while reading that statement. Do members have any questions that they want to put on this instrument to the minister? No, I do not think so. In that case, we will move to item 3 on the agenda. I invite you to move motion S4M-14576 that the Economy, Energy and Tourism Committee recommends that the renewables obligation Scotland amendment order 2015 and draft be approved. Do any members wish to speak in this debate? No, I assume that you do not wish to wind up, minister. I will then put the question. The question is that motion S4M-14576 be agreed to. Are we all agreed? We are all agreed. Thank you very much. Can I ask the committee our content that the convener and the clerk produced a short factual report of the committee's decisions and arranged to have that published? That is agreed. Thank you minister. If we can reconvene, we are now on item 4 on the agenda. As a committee, we are now commencing our pre-budget scrutiny in relation to the Scottish Government's budget for 2016-17, which has not yet been published. However, because of the parliamentary timetable, we require to start our budget scrutiny work. We will do that in anticipation of the publication of the budget in a few weeks' time. I would like to welcome our first panel. We are joined by Norman Kerr, Energy Action Scotland, Professor David Sigsworth, who has recently stepped down as chair of the Scottish Fuel Poverty Forum, Stuart Wilson of Tyche in Isgall. I will pronounce that properly, Mr Wilson. Almost, thank you. Hella McEwlin, who is from Dundee City Council. Welcome to you. Oh, and the theme for this session is fuel poverty. I think that we are going to run this for about just over an hour, maybe until about 11 o'clock or so. Because there are four of you on the panel, I would ask members if they would direct their questions initially to one panel member, rather than to make them open. If you would like to respond to a question that is directed to somebody else, if you just catch my eye and I will bring you in as best I can as time allows. If I can ask members to keep their questions short and to the point and answers as short and to the point as possible, that would be very helpful in getting through the topics in the time available to us. Can I maybe start off by asking a bit about the background to where we are with fuel poverty? Maybe start with Mr Kerr, put this to you first and then bring in Professor Sigsworth thereafter. In terms of the trajectory of fuel poverty, we know that there are essentially three components in fuel poverty, household incomes, energy prices and measures to reduce energy consumption. In relation to the first two, household incomes would seem in general to be improving as we are coming up with economic recession. Energy prices, which have gone up substantially in recent years, seem to have plateaued. There is some indication that they may in fact be reducing. What is your sense, Mr Kerr, of the impact that these wider economic changes might have on fuel poverty figures in the coming year? I think that you note that prices have plateaued just now. As we look to the future and where we might be bringing our energy from, there is no guarantee that that plateau will remain. I think that the trajectory for fuel prices continues to be one that will increase. How steeply that increase depends on where we bring that energy from in a global market that I have got to stress. That will have some impact on fuel poverty, undoubtedly. I think that we have seen comments around if fuel prices in 2002 had risen at the same state as inflation, fuel poverty would be a lot less. I think that that is quite false, because in 2002 we all knew that that was the rock bottom for prices. The prices of the energy industry could not sustain, so that was always going to be on an upward trajectory. Prices today, if you go back to the early 80s before privatisation, prices then, if you put them into an economic recalculation, they are the same prices as today. The price that you pay in the early 80s is the same price that you pay in real terms. We have not actually seen a great fall or a great rise in energy prices that have remained fairly static. However, we know that there are more impacts to come along on fuel prices that may well drive prices up, such as the way in which we have a distribution network, for example, and the way in which we will bring new generation on will all have an impact there. What we are also seeing in terms of—you spoke about—an economic growth for the fuel poor is not necessarily the case. If you listen to people such as the Poverty Alliance or Child Poverty Action, you will get a different story from them. I know that the Scottish Government is promoting very heavily the living wage, but we are still seeing a lot of fuel poor households now being in work. It is not people who are living on benefits. It is in work poverty that we are seeing just now. It is not a great optimism that I have for the future in those two particular areas. Professor Sixworth, do you want to add anything to that? I think that three things really. Nor is right that fuel prices have plateaued, but the last statistics that we have currently published for fuel poverty are the 2013-14 figures for Scotland. From between 2013 and 2014, which is outside the range of those figures, the average fuel prices that is published by DEC for the whole of the UK rose about 3 per cent. We are still seeing some increase, and I suspect that we do not have data right up to date, but I suspect that that is still true. I stress its average. When you look into what average means and the fact that, at the moment, if you take the average that that is based on, we are talking about a bill of something like £1340 a year or something like that, the average, and that is for a dual-fuel house three-bedroom semi type of thing. If you take that similar type of property in our rural and island areas, that could be £2,000, and that difference makes a very significant to any average that you try to do. Put on top of that, our biggest problem in fuel poverty has been that the help and assistance that we have had from the wider Spanish Government has been around using Scottish Government's own money but also eco funds and things like that. They have had to be deployed in a particular way, and that has not given us the means of being able to treat the hard-to-treat properties that are in more remote locations. Part of that fuel issue that you mentioned, you mentioned the three drivers, I think that there is a fourth and I will come back to that. Of those three issues, if you take fuel price, the actual fuel disadvantage of not being a dual-fuel customer, of not having a dual-fuel discount, and we have seen this last week off-gymns report on distribution pricing, where there is some recognition now that distribution charges in our remote areas are also much higher. If you are on electric heating, you are locked into fuel prices and unit prices that are far higher than we would see. All those factors are mitigating towards our worst problem, which is still to find a way of tackling hard-to-treat properties in more remote locations. I will follow up on that, but I know that other members want to come in and talk about rural areas in particular. I live just outside Perth, so we are not on the gas main. We have oil heating. The cost of my oil heating has come down 50 per cent in the last two years. I am paying half what I was paying two years ago. There must be a beneficial impact on some of the rural households that you are talking about, who similarly will be relying on heating oil. They must have quite a substantial fall on some of their costs in the same period. Of course, we do not have figures on that because it is not regulated. Of course, there will be significant differences between what fuel discounts are available in those areas. Although I would say nationally that oil suppliers have tried to do, in a concerted way, giving assurance that they are keeping prices in check, but it is not something that we can judge and gauge. What I would just like to come back to is that fourth issue. In terms of fuel poverty, there is an increasing awareness that when we provide measures to eradicate fuel poverty, unless the individual in that home has been shown, and not just shown once, shown and trained to actually get the best out of that, it will not work. We will find that the measure is only partially effective. We have got to tackle that measure too because that fourth issue of how they live and how they use the system will come from deeper integration of social care with fuel poverty measures and primary healthcare. Perhaps Mr Wilson can put the question to you around the point about rural communities and the impact of fuel prices on them. Yes, your issue on oil price is an interesting one. Of course, to impact fuel poverty, it presumes that the oil has been used in the first place and that the household can afford to heat the home in the first place. What we tend to find is that people will effectively self-disconnect because they just can't afford to fill an oil tank. Usually, there are minimum bulk buy amounts that you have to buy to fill your tank. We find that households simply can't even afford that. While the prices come down and it's similar in our area, the price has come down from maybe about a peak of maybe 75 to 76 pence a litre down to now about 35-36 pence a litre in the last month or so. It's come down significantly. However, the people who are in the most fuel pool or the extreme fuel pool, they would have been self-disconnecting anyway and they could only use a limited amount of oil in the first place. It doesn't necessarily have an immediate impact on the number of fuel pool. If I can just go back on one thing about the average price per household, from our survey reasonably recently, the average price on the western isles and similar to stats that come in from our colleagues in Skynlachalsch, the average household bill is about £2,300 to £2,400 on islands, so it's significantly higher but £1,000 higher than the average nationally. Thank you. Just two wee points. Price of fuel, quantity of fuel isn't there. We're coming in a really bad winter if there are in berries or anything to go by, so there's a fourth factor, the quantity of fuel. Just to echo what David said about use of system, my council is involved in large-scale external wall insulation, which in some ways is a holy grail. It's very expensive, but with heaps money from the Scottish Government, we're really going into wholesale. You might think that external wall insulation has no moving parts. You're up the building up and that's the end of the story, but there's even a requirement for advice there because people think that we say to them, you will save money on your fuel, but they don't realise that you've got to switch your thermostat down or your TRVs. It's not just a case of letting it be, you've got this lifestyle changes that come with it. Okay, thanks for that. Just before I bring in Dennis Robertson, I think he wants to pursue some of these issues. I just want to ask one more question, maybe start again Mr Kerr with yourself. We know that the Scottish Government has a target to eradicate fuel poverty, as far as reasonably practical by November 2016, so that will fall within this budget period that we're looking at. What would you put the chances of that target being met? Sadly none. I think that we are at a stage where we have, this year's figures are not yet out, they will come out at the end of November, but last year's figures were 940,000 households. We do not treat anything like that per year, so I sadly have to say that the fuel poverty target will not be reached and by some considerable way. What I can say is that we know that fuel poverty levels would be significantly higher had it not been for the Scottish Government putting money in from the public parts integrant programmes. Nonetheless, the fuel poverty target will not be achieved. Professor Sixworth, do you agree or disagree with that? I think we've got to remember that the 2016 target was set with a rider that said, as far as he's reasonably practical, and I think if we look at what has been done over many years within the limitations of the devolved powers, we have made quite a substantial move forward. In fact, if we look now over the last five or six years at the improvement that we've seen in the number of EPC, B and C-rated properties that we have in Scotland, we're doing far better, relatively, than we're seeing in England at the moment, in percentage terms. I'm not trying to say that's right. I'm just saying that I'm asking myself, given that at the moment the Scottish Government can't actually regulate the fuel price and they're not in control at the moment of household income, as far as what is reasonably practical, some would argue that quite a lot has been achieved. However, it doesn't alter the fact that I don't believe, as Noreen Nass said very publicly, I don't expect us to be anywhere near eradication next year. What I am pleased about, and I said in my recent report that I published, is that I think that the national infrastructure priority gives an opportunity, looking forward, to actually think about uniquely Scottish solutions that address many of the issues that we've been talking about already. Just to pick up one point that you made, Professor Sixworth, are you advocating that the Scottish Government should have the right to regulate the fuel price? I actually would like to see Ofgem having some responsibilities to this Parliament and being accountable for some of their measures in setting the context. It's not that I just believe that I know that, at the moment, we need different solutions to the ones that we've been seeing spread more widely in urban and suburban areas across the rest of the UK. Thank you very much, convener. Before I move on to the poverty groups that we have, the convener brought in the target. It was a point that Mr Kerr made earlier, and it was to do with the relation to fuel prices and inflation. Is it not the case that if fuel prices had been in line with inflation, instead of 39 per cent of households being of fuel poverty, we would have probably been about 11 per cent, and 11 per cent is still high? Is it not the case that if the prices had been in line with inflation, we would have been in a situation of 11 per cent rather than 39 per cent? Mr Robertson is entirely correct. Yes, that would have been the case. The point that I was making, though, was that the prices in 2002 were artificially low, they could not be maintained at that level. That was at the time where the market was at, you could say, its worst or its best. Elgi companies were not in profit, they were actually losing money at that time. It was unsustainable. The fact that we had a regulator who removed price controls could argue that it may not have helped the price control mechanism of RPI plus or minus X that the energy companies had to take to the regulator when they wanted to increase. The regulator took that away to encourage more competition, but from 2002 we saw energy companies from 13 offerings down to six. We had a lot of joining together, but fuel prices did rise, and they rose well above inflation. Had it been with inflation, yes, but was that likely? The answer to that is no. That was never going to be the case. It is a false hope that people had that it would be with inflation. My main point is that Mr Wilson might be able to follow up on that. At the moment, we have three fuel poverty action groups. Is that the right way to go, in some respects, having three groups? Is a one-size-fits-all not more appropriate, or having the three groups—another one is a short-term strategic group—and one looks at, specifically, remote and rural, is that the best solution that we have to have those three groups and maybe working together? Do they co-ordinate, for instance, and work together? I am not sure that they do. Should we have just one-size-fits-all? I think that, I guess, whichever way you go, they have to communicate with each other. Whether it is one group or whether it is three groups, as we have at the moment, I think that whichever structure is in place, it has to recognise that there are differences across the country. I am not convinced that simply combining it into one group would be a cure-all for that. The rural task force has a job to do, and from my participation so far within that, it is seriously picking up some of the key issues in the rural areas, which, hopefully, will be then tagged into a report at the end. I welcome the fact that there is a rural task group looking at that, because in some cases—I think that, as Professor Scott mentioned, when we look at average prices and all the rest of it, when we look at remote and rural, and certainly in Scotland, prices are much higher. Identifying the specific needs of our remote and rural areas is something that we need to do. How do we try to resolve some of the problems for those areas, in line with what is happening within the bigger framework, say, in central Scotland, and trying to tackle fuel poverty across the board? Should there be a different scale for grants and subsidies for remote and rural? I think that it comes down to priorities and how you want to prioritise the limited money that you have. Do you want to tackle the most fuel-poor areas first? How do you prioritise that? Clearly, the most fuel-poor areas tend to be, as you go further away from the big population centres and the more rural you become, as well as some concentrated ones in the cities. I think that there is a thing about how you prioritise funding towards the most fuel-poor areas. To do that, you then have to recognise that what you tend to find in the most fuel-poor areas is that the housing stock there and the part of the triangle that you talked about earlier, that we do have quite close control over in terms of energy efficiency, it tends to cost more money in the more rural areas simply because the housing stock is different and it demands a different solution. The point that you made to the convener in terms of people's self in attend regulating but disconnecting because they do not have, for instance, the finances to fill an oil tank is quite important because people are probably dependent on one fuel source, which tends to be electricity in some of those areas, because they are not connected to the gas. Does that pose a larger problem for a remote and rural? Are they looking towards maybe looking at alternatives in terms of solid fuel and that could be burning anything that they could find? It is a huge... Electric prices in the islands particularly are extremely high and the point that was made earlier regarding tally switchmeters and where clients, householders, are effectively locked in, not technically locked in, but it is very difficult to switch when you are on a tally switchmeter in some of the tariffs. It is quite difficult to do. A dual meter, for instance, SSE, who is the biggest supplier in the north of Scotland, has a tariff called total heat and total control, where that is a 24-hour tariff for heating and hot water, and that 24-hour tariff is on a low rate, but there is a standard rate for everything else in the property, so your cooking, your lighting, your TVs, your hi-fi, all that is on a standard rate, so you have a dual switch and the heating element is tally switched. It is controlled by the power company in order to help the control of the grid, but for customers to go into that tariff, they have to have that meter. SSE are the only ones that offer that tariff effectively, so if you phone up to try and switch, or go on to the comparison sites, you will not find it, but it will be difficult to find, and if you try to switch to somebody else, they will say, sorry, I do not know what that meter is, and we cannot switch you, and whilst they might have an obligation to switch you, technically they find it very difficult to do it, so if you are 65, 85 and you are phoneing up to try and do that, and somebody says, I do not think we can do it, you tend just to put the phone down at that point, so it is very difficult to switch across, and what you tend to find within those tariffs are, although just recently, literally the other day, the tariff came down at this rate, but the standard rate of that tariff is enormously higher than what you would find on other companies for standard rates. You can find £10 a unit on the market at the moment for standard rates, whereas on that THDC tariff, it might be up at 19 per cent, depending on the standard rate. Gareth, are you not a director of SSE until recently? I was. Okay. Do you have anything to say on this issue? No. I left SSE in 2005, but those were solutions that were developed, certainly, while I was working with the company, but I have had no contact with them on that sort of basis since 2005. Okay. Mr Carey wants to come in. I think that we often quote SSE here as the only company across Scotland, both of the main electricity suppliers developed dynamic tele-switch tariffs as a means of flattening their generation curve, so it equally applies in Dumfries and Galloway, as it does in Orkney and Shetland. It's now at a stage where I think the companies themselves are looking at that as a tariff, because it's not serving the purpose that it was intended to when we had vertically integrated companies and the companies could dump excess energy at some point during the day should they have it. However, what I would say is looking to the future, there is an opportunity to adapt or adopt dynamic tele-switching if we're looking where we have a vast number of wind turbines or we have some tidal power or, as we've seen now, the growth in solar. We will need things to compensate and store energy and dynamic tele-switch gives us the opportunity to do that, so while it's not serving well just now, that's not to say that with some further investigation, with further infrastructure by the companies, we don't have something that can actually serve as well as we move forward into the future. It's a fairly old historical thing, but we do have the opportunity to bring it up. If you think where we are, National Grid will spend approximately £1 million a day on constraint payments, in other words, telling companies, we don't need your energies now, please don't generate. Why are we doing that in remote rural communities who are living underneath turbines? Surely we should be finding an innovative solution in which to store that energy, dynamic tele-switching gives us that opportunity along with things such as battery storage and others, but just now, Mr Wilson makes a very valid point, it's not the best for many, many customers and not just in rural Highlands but along the borders as well. Are customers in remote and rural being disadvantaged then? Are they being, in one sense, penalised for not being on, say, for mainline gas and stuff like that? So they've got to rely on electricity regardless of how it's generated and the fact that maybe we don't have a storage facility at the moment. So they're being disadvantaged. Should we be looking at some way to try and mitigate that, Mr Kerr? There is already some mitigation, there's the hydro replacement scheme that's around and that does give some compensation, but Ofgem's report last week recognises that the way in which we operate our system in those remote and rural areas, the cost to the customer is around £60 a year. Not an insignificant cost but it's still a cost and I think Ofgem has stated that we've got some sympathy with reopening that investigation to look at whether or not we do have the infrastructure that we need. I think the root of this question was did we need three elements to the fuel poverty forum and I chaired the fuel poverty forum from 2011 and it was very very difficult to move away from talking about measures and talking about monitoring and talking about let's say the ongoing development of those schemes. The problem I've seen and has frustrated me for some time is that measures will not solve fuel poverty completely. I mean we have homes which are BMC rated in Scotland now where people are still living in fuel poverty and the solution that's required has to look more widely and over the summer myself, Norrie was involved but some other members of the forum spent quite a bit of time mapping all the connections that we could see direct and indirect connections to the fuel poverty issue and those maps are very complex and to make real sense of them they need more work. What they showed is that many many parts of government NGOs and others had to collaborate and cooperate and they had to join up in a way that's not happening completely at the moment and I've provided those maps to government and they're just part of looking forward and making sure that what comes forward is a different sort of structure but also a different weight of solution because in those rural areas if we look at biomass if we look at a lot of renewable solutions that can be under the community's own control and can even be maintained in a local economy where we've upskilled the local economy to be able to have the skills to install and maintain their systems. This actually leads to a completely different picture and that's the sort of thing this third element that certainly I've just been asked to chair as a short-life working group will not be looking at the ongoing that will still be the preserve of the fuel poverty forum but trying to bring together independently with a different group of experts that long-term picture and putting it to the government that's where I think the difference can be made. That was extremely helpful. Professor Zegwarthen he actually anticipated my question which was even more helpful so convener I think that's wrong. Okay thank you I've got a couple of members who want to come in with supplementaries before we move on. Lewis MacDonald and then John McAlpine and then we'll need to move on I think. Thank you very much and I was struck by the reference to totally heating total control and tele-switched systems. The witnesses will be aware of the competition and markets authority investigation into the energy market and when the CMA appeared before this committee they undertook that they would look at that issue as one of the issues that meditated investigation. Are there other areas where witnesses believe competition issues arise and are a cause of fuel poverty where people are not able to access a proper choice and that is part of the reason for them finding themselves in fuel poverty? I think we saw Ofgem some time ago take action to reduce the number of tariffs that were around and they asked companies to pull that back to format tariffs. We believe that that's not necessarily been the right way we believe it stifles innovation and I think Ofgem are now looking at widening that out again. Professor Sigsworth talked about renewable energies. There is no dedicated tariff for renewable energies just now. If you have an air source pump, a ground source pump, there is no dedicated tariff for that. If we want to expand that type of measure, then we need to look to the energy industry to come forward with tariffs. So there is a bit of competition that's not working well there because the regulator has stepped in. Companies do have the opportunity to go to the regulator to ask for a derogation to say we've got something new, we want to try and I think the number of derogations that Ofgem have given have led them to believe that they need to carry out that investigation a bit more. I think that as we've heard the dynamic tele-switch is one that I think a number of suppliers would like to get into and I think between the two they're probably the biggest barrier. In some ways in Scotland it's about brand loyalty. Many people in the north of Scotland remember the hydro board, they have a lot of relatives who work for the hydro board. They're a major employer in that area and I suppose if you're getting someone to switch supplier my question would be are you getting them to switch supplier for the sake of switching or are you getting them to switch for a better deal and the reason I say that is that we're currently in the big energy saving week where people are being encouraged to look to change supplier. However, if you're on the wrong payment method for you and you move to a different supplier still on the wrong payment method then you're no better off. If you're on the wrong tariff for you and you move to a different supplier still on the wrong tariff you're no better off and I think the point that's been made in Heather McAllan made it earlier about education is one that we need to take much more seriously so that when people are making a comparison then they actually understand what they're doing and they can do that and indeed Ofgem have worked with some of the switching sites because again the switching sites until recently were unregulated and it's been useful to have more guidance to them because a lot of them will go on if you want to switch supplier today not necessarily I want to switch supplier in a month's time so there's a restricted number of tariffs that switching sites will show you when you go on and there will also be some that they don't show you because they don't have a deal with a particular energy company so I think organisations like citizens advice perhaps in the future of a role to provide a more wider detailed provision of what tariffs and payment methods are available for all members of the public so in terms of competition I think we've got more of an education to do before we can say that people will buy into competition for their benefit not just for the sake of it I agree with everything Norris just said I'd just like to go on a bit further into different solutions because what Norris was talking about there was what I would call relatively conventional solutions we know now that there's a huge enthusiasm in communities in Scotland for owning and operating their own energy assets and systems and the Scottish Government put £20 million up not too long ago for the first phase of a challenge fund for community energy and as I understand it I may have these statistics wrong I'm just dredging them up from the back of my mind I think there are 140 applications for that first so that's the level of enthusiasm for community energy and a goodly portion of those couldn't be actually taken forward for consideration because the regulatory framework required for them to work either because of licensing or one thing or another won't didn't enable them and so many of them dropped out and I think we've talked about Ofgem already Ofgem are considering unconventional models of regulation as these markets develop but we in Scotland have got some of the most fertile opportunities for that and I think we've got to push on that front as well because a lot of these renewable schemes and particularly community ownership and operation of them will need further enabling from Ofgem and that's why I was saying we ought to be hauling them to a county or two well briefly because we we are going down the clock just to ask if either China inch and gal or indeed the fuel poverty forum will make a submission to the competition in March authority enquire on on telly switch meeters and and other matters yes absolutely just to go a bit further back in the earlier conversation my supplementary you talked about the three elements obviously household income was one of those elements and I also sit on the welfare reform committee and we commissioned some research from Sheffield Hallam University earlier this year that showed that the impact of welfare reforms to date in Scotland was about 350 million for tax credits and some families had already lost about 1800 pounds surely that must be having an effect on fuel poverty as well of course it is mean our energy advisers added to their the role is delivering Tesco vouchers so they're getting dragged into stuff that's not just fuel poverty it's food poverty as well I can't really say anymore yeah I mean absolutely it's the case where in particularly in the islands the western islands has one of the lowest average incomes in scotland i think we're second or third lowest in scotland so clearly when you begin to take a few hundred pounds out of of a potentially a monthly wage then or income then that can have serious serious effects and the immediate effect of that usually is people will will ration their energy at that point and and they won't heat to to the standards that if you're going to an ebc and it says that's a even if it's a berated home it might be an efficient home but they can't heat it they can't afford the heat so while it appears as reasonably good it's not effective because the income side of the of the triangle prevents them from getting it from actually heating their home so it has a direct knock-on effect obviously on the number of people who and we see it when we work with some of the utilities around debt relief and the types of customers are going to go into debt and then get caught in that spiral and it's difficult to get them back out again and trying okay right okay i think we need to move on because we're getting behind the clock and i want to move on to talking about the budget i'd like to come to the budget just as an input to that though before i i do ask the question can i ask kether m'r cwlin a question about in looking at the in dundee the allocation of funding from heaps a bs to private sector and then the council's capital budget i mean is it realistic that you're applying i'm not just dundee the scourge index of multiple deprivation i mean for example improving houses and game street as opposed to whittfield or ffintrey or curtain i mean how do you is it realistic to use simd to i mean are you using that we use it as a proxy for fuel poverty because mean fuel poverty is notoriously difficult to to measure to track it's so dynamic and it's so costly to say this household is is fuel poor by the definition mean as soon as you open the door you know they're fuel poor but in the absence of anything easier mean what we want is a quick way of identifying the worst and get stuck right in there to to do something for those affected but i think we want to also avoid divisions and complaints of relatives as to who's getting funding from where which is relevant to the question i'm about to ask in terms of all the witnesses of amae what would you like to see in the forthcoming scourge budget to affect fuel poverty and i know you're just going to say more money but is there anything else that you can consider answered my question i think this committee some years ago i had the the pleasure of being here and was asked about the level of funding that was needed and at that time i said energax in Scotland had calculated from 2006 until 2016 we needed 200 million pounds a year this committee took up that recommendation indeed included it in their their own recommendation we've not seen that level of funding achieved over that period of time i think what we do need to do is have continued funding and it may well be that that budget is as you will have seen has risen over the years we've gone from about 65 million and that's bumped along for a couple of years it's now 119 million that the Scottish Government is putting in i would expect them to at least at least maintain that but i would be hoping that they would at that time undertake their own research to discover how much money is needed to achieve their education of fuel poverty now that might be to bring every house in scotland up to a certain epc banding and indeed over the last year energy action scotland along with some others was part of scotch government working group on the regulation of energy efficiency in the private sector reaps as it went under the heading and there was a great deal of work undertaken there by that group to look at the amount of money that was needed and i think the figure we come up with was an average and i distressed an average of two and a half thousand pounds per household to bring it up to somewhere in the region of a band D it's not a huge step up from where we are but nonetheless it's an important step up so i think the question in the budget is not how much is in the budget for this year although as i say my expectation would be that it's a minimum of it is just now but what do we do with the budget moving forward on a national infrastructure priority and can we actually set budgets over a five or a 10 year period that commits future parliaments into that that national infrastructure because that's what we need to look at if we're talking about big infrastructure programmes for example the new fourth crossing that's over a longer period of time i think we need to ask ourselves where do we want to be and how much do we realistically need to get on the table. Elgin Jackson Scotland is not saying that the Scottish Government needs to fund all of that i think the cabinet secretary has spoken before he's quite interested in things like equity release to allow people to use some of the equity tied up in their property to make home improvements where they can so it's not all about just asking the Scottish Government for funding it's about trying to identify innovative ways of funding i think what we do you need to recognise is that the budget whatever the Scottish Government put forward their aspiration around having that matched by the energy company obligation will not come to fruition. It's really to what i've just asked Heather i mean and we know it's going to be tough questions are we targeting the spending that we have are we really targeting eco and heaps as best we can to ensure we get the biggest bang for our buck. Yes and no because i would say eco is not targeting eco is targeting where it can get the biggest bang for its buck in carbon saving and that's about replacing a boiler in the central belt of scotland it's not about addressing the issues that mr wilson highlighted in the western aisles where the carbon saving will be an awful lot less but the the saving in warmth and the increase in energy efficiency will be very high so eco doesn't do that but what the scotland government heaps abs programme did was say to local authorities we expect you to come up with a fuel poverty plan and by and large local authorities have undertaken that you used the question of index multiple deprivation that works in some areas it doesn't work in rural areas and one of the reasons it doesn't work in rural areas because the simd talks about actually access to a vehicle and if you have access to a vehicle then that goes against you you've got to say in rural areas if you don't have access to a vehicle you are very isolated and stranded so a lot of people will have access to a vehicle in a rural area and that skews the index multiple deprivation so you know just because rural local authorities may not use that as their only guide doesn't mean to say that they're not targeting fuel poverty and a number of them have done very good local mapping exercises using a whole lot of local data simd for one the council tax banding for another levels of housing benefit so there's a whole range of things that local authorities have been doing to overlay that and they are starting to target those areas the point I make is though we're doing that now we should have been doing this 10 years ago okay one last question have i me something it's very important for me to get the other members of the panel to answer the key question really it's just what would you like to see in the Scottish Government's budgets and if you can be fairly brief that we have Mr Wilson do you want to start you talk about how do you how do you prioritise where you spend if the difficulty with heaps the heaps programme has been and it's been a good programme don't get me wrong it's been a good programme but the difficulty is it's been coupled to eco and because it's coupled to eco and a leverage you're trying to get a certain leverage of eco in through heaps which is a in a sense is a kind of sensible thing to do but what that ties you to then is where the energy companies will spend their money in eco and they want their the biggest bang for their buck basically and they will go where it's cheapest and so they will not tend to gravity out to the rural areas because it's dearer to do things and it costs more and it's harder to get measures to work within the eco programmes and so they tend to not spend their money out in the rural areas so that makes it difficult to operate their heaps programme in the rural areas so I would say one of the things if we're looking at in a budget kind of policy there is decouple eco from heaps and not to say don't use it but decouple it and and don't make that a kind of priority in terms of trying to get big carbon savings off the back of that it's fuel poverty we're talking about and not necessarily carbon. SIMD doesn't work in the rural areas it's just not a good proxy in the rural areas because of the because of the domains within SIMD as Norrie has mentioned and the indicators within those domains it doesn't pick up fuel poor because of the dispersed nature of geographies and households and villages in the rural areas it just doesn't work well at all and for that reason one of the big schemes that predated eco called CESP principally around poor fuel poor communities was meant to target them lots of the ones in the island Scottish islands just never come in under the radar just they never they weren't eligible because the SIMD was the driving factor for that so they were excluded from those schemes altogether so you have to be very careful about how you use SIMD. SIMD is a good measure for what it's meant to do but if you use it as a proxy for fuel poor in the rural areas it doesn't work very well and we need to do something else. In the western islands we're trying to work with the NHS who have very good local kind of sets of data around our health and we're trying to couple that together with the fuel poor because clearly health and fuel poverty, cold damp homes tends to generate conditions and we're trying to couple that together and get the data sets working together. You then get issues around data protection which you have to try and overcome but that's the aim at the moment to try and do that. The other thing that was one that Professor Sigworth mentioned about that fourth element that we've continually missed and it's about in-house advisers from trusted local networks and one of the things that we've talked about in the fuel poverty task force was again about it came out very strongly at the last meeting local networks trying to deliver in-house advice off the back of whatever programmes we put in place and take a chunk of the HEAPS programme and point it to that so that's another possibility. I just really want to endorse that point. You cannot underestimate the use of advice services and the multiplier effect that they have. In Dundee, over three years, we've got £4 million worth of a warm homes discount where eligible households get a saving of £140 on their electricity here and they've been able to do that because they've got out there into the houses. You know, for every pound spent on advice, you could say 20, 30, 40 is the effect of that so it's an effect of use of money. Just one last question. Last week I met an international investor from Ireland and they've been investing a lot in energy efficiency and now Professor Citra has mentioned community development and renewables, which we support, or at least equity, shared by communities. One of the things that they're doing in Ireland is training young people in their communities to insulate, to roof insulate things like that. If there were an element like that in the budget, would you support that? Do you believe that communities are capable of doing it? Mr Kerr says no. I think that that's been a serious challenge of the propositions that the pure poverty forum has been developing for well over two years now. Our interim report that we put forward, I think, in 2012 started that and I personally have been involved through green growth panels with the Government to see whether that could be enabled through Skills Scotland and that sort of thing. I think that it's an absolute critical element in getting the best out of this for communities and for further economic development within communities themselves. If I could just say one thing more about the budget, I think that everybody's reinforced this that we've got to make sure that whilst I am a huge proponent of good climate change practice, one of the obstacles that we've seen is that carbon has been the surrogate to fuel poverty eradication. The assumption was that if you make a home energy efficient, you solve fuel poverty. One of the things that I hope comes out of this session is that that's not the case. You go probably a long way towards it but there's lots more to do as well and we do need within the budget a recognition of some of these things that are the things that will have to add to better management of energy efficiency to actually resolve fuel poverty. So not a surrogate, we want a direct focused fuel poverty reduction component and that by the way is what the environment minister promised in making the announcement about the infrastructure priority in June. I've got a long list of member stuff to come in so I think that we can try and sharpen up a little bit on responses which are very interesting but if we can try and type that a little bit otherwise it's going to be here till lunchtime and we do have a witness session after this. Richard Lyle. I've got a couple of questions and possibly a comment but I'll try and be brief. Helen Macon and Norman Kerr actually touched on the points that I was going to raise. We've done £119 million in the budget for insulation, all the different things, all the good work that's done in Dundee and all the other councils that are doing cladding and roof insulation etc etc but you touched on the point, the very point that I'm going to ask you. Have any data on afterward done the insulation to houses that their bills actually have reduced because physical problem is a lot of people, elderly or people who don't know, don't know how to turn down a thermostat. Some of these actual, if you go into your house and you look at some of them, they can be actually quite complicated for the elderly. Do we have people who are going round continually or showing people how to reduce their home and do we have any data to show that the millions of pounds that were spent in insulation is working because their actual physical bill has went down? I'll answer that. I get asked that question all the time. I'm very reluctant to be drawn into either saving £150, £180, because as soon as you say that somebody will say, you promised me that and it didn't happen, so it does vary from house to house. But we do have advisers who go round, not as many as we'd wish, as a scrabble every year for their on-going funding. I know that we've got Home Energy Scotland, but we've got an in-house team that has been described by senior council officials as a duel in the councils. It's worth its weight in gold, so they do go round, but they're stretched. There is a requirement for some proper research into this, and I understand that it's south Ayrshire. They have just commissioned a PhD student to do research into this very subject. I think that it's a joint project with the local health board just to pin down what exactly should people be told what are the potential savings, what are the savings at the moment. It's easy to say, we'll do this to your house and you're going to save a fortune, but the follow-up advice and putting a number on the potential savings and real savings is a lot harder, and it does require that level of academic research. To be even deeper for the convener and Norman, I'd like to come on to the point that you made. We'll spend all this money on outside cladding, wall insulation, roof insulation, millions and millions of pounds. Is it working? Should we be looking at a point that I've been in several occasions where we're building new homes and we should be looking to put on solar roof panels in order to generate some sort of energy back into the house? Should we be looking at solar panels that you touched on earlier in order to ensure that what we're doing, whereas it might be working, but I believe that we could actually do more, which would touch on the point that Professor David Sigurd was going on about individual areas looking at helping themselves. Should we be looking at doing more in solar panels in order to generate back into the house? Yes, I think is the answer. We continue to bring forward amendments to the building regulations every year. Indeed, one of your parliamentary colleagues, Sarah Boyack, tried to have a bit into the building regulations that said that a building should bring forward 25 per cent of its energy demand from renewable sources. Sadly, I don't think that that made that to the statute books for whatever reason, but that would have achieved just exactly what you're saying. The difficulty that we have, Mr Lyle, is that 80 per cent of the buildings that we have today, we will still have in 2050. It's about retrofit to that, not necessarily because changes to the building standards won't impact on that retrofit, but we need to do some more, and the savings do work, but to come back to the point that John McAlpine made, in many cases we're improving the energy efficiency of people's homes. They themselves won't save money. There's a rebound effect here. What it means is that they can actually heat their home to the standard that they need to heat it just now, so they're not saving money, but they're actually able to heat their home, and that's got a lot of benefits in terms of health and other things that, as Heather says, we're already trying to estimate that, we're trying to understand that a bit better. Mr Dawson, you're on the committee. On that point, we did a report for our local authority just last year or earlier this year on the cost benefits of running the HEAPS programme and looked at the individual measures, because we've run it for a couple of years now and looking at cost benefits off the back of actual customers and actual bills. For the relatively low cost measures, they've got a very quick payback in terms of investment and financial payback, so five, six years for some of the measures. The hard to treat measures, external law installation, has got a longer payback, but the payback is just within the life of the asset for the terms of eco. Eco give life of assets for each of those measures. The simple measures, lofts, cavity wall, installation, draft proofing, they all payback very, very quickly. The hard to treat measures payback, but it takes a bit longer, but it comes back to that point. You're not just saving the energy bills, you're making people's lives completely different, transforming the lives where they don't just all hud on one room, literally. The kids can go to the bedroom and study. It's things like that that you have to take into consideration as well, but side is the actual financial benefit. Can I just also make one comment? Do you understand your electricity bill or your gas bill? You turn it over and you look and you go. It's like double dutch, therms, kilowatts, whatever. You were on about the factor of energy companies giving us better prices. Could you not give us a bill that we could all understand? We all know what the price is on the front, but on the back we've got this double dutch that nobody understands, and if we could all get a simpler form, I can say well, if I switch to x company, I will save £100 a year or whatever. I'm waiting to make the bill simpler. You're right. I spent three hours one evening trying to explain to my father-in-law how to change cubic metres or cubic feet into cubic metres and then multiply that by the calorific value. It was a painful conversation, but yes, we have made those bills easier. We're now getting graphs on the bills. We're doing a lot more there. It would be nice if we went to a system where, as you drive along a high street, you see a petrol station, pence per litre, then we should be able to have that on the bills, and I think that will come because energy companies are trying to provide much clearer billing than we had five, ten years ago. We're moving in the right direction, but there's still more to do. Thank you. Good morning, everybody. The question of money, I would like to press you on a bit further. We've touched on it a bit, but this is budget scrutiny. David mentioned the national infrastructure priority and reminded us that that was designated formally in June. A year ago, when the committee was doing budget scrutiny, John Swinney agreed that it was going to happen. A year on, we really should be at a point of knowing what is going to happen under that designation and how much it's going to cost. Yesterday, the climate change minister did not seem to have any information about that when she was asked about it in the chamber on the emission targets statement and seemed to imply that they were going to spend another two years designing it. Have any of you been brought into discussions within government to talk about what that national infrastructure priority is going to involve, what will happen under it in the coming year and how much it's going to cost? No. Not at all? Not at all. Do you know anyone who has? I believe that there are some tentative discussions. Several servants are going out just now, but I think that the point that you make will take some two years to design. It seems some way in the distance. A very long way in the distance. I think that the group that I've been asked to chair, a short-life working group, is specifically focused on that. In fact, it has taken a few weeks to get to the point where we can appoint the people. Energy Action Scotland has been commissioned now to be the co-ordinator of the administration and all that's happening this week, so I'm hoping that we get the group up and running by late November. But the objective is that over the next year, and I hope well before that year's out, we are going to be looking at how we see an energy efficiency scheme within that long-term infrastructure priority, delivering the eradication of fuel poverty. We've talked about budgets and, interestingly, the £200 million, and I have to give credit for that number largely to Norrie and his team because if we go back, I think the first time it was mentioned was from some energy action Scotland worked some time ago, but it was focused specifically on eradicating the worst cases of fuel poverty. It wasn't the idea it was never that 200 million a year would do the whole job. I think that what we have to do is make sure that we do have that focus within this energy efficiency priority that isn't a surrogate through energy efficiency for fuel poverty eradication. It's specific. At that point, and you're earlier one that the same approaches are not necessarily right in terms of a climate change agenda and a fuel poverty agenda, both of which are priorities legally committed priorities. I'm hoping that I will be responsible with my group for bringing an independent view to government of how this might happen in that infrastructure priority. Can I just ask that the panel's comments on one figure then? 200 million was what we were talking about a couple of years back, and I think there was a recognition that the longer you leave it, the bigger the job gets to get to. The national infrastructure priority talks about going beyond just domestic buildings and talks about all buildings. We're obviously talking about a bigger number, but the existing homes alliance of which Energy Action Scotland is a part in May put out a briefing saying that their estimate was a total of £4.5 billion over 10 years, so £450 million per annum, and also talked about matching that with private investment. Is that a figure that the panel think still stands? Is that a reasonable estimate? And should we be judging the level of priority that the Government is attaching to this issue by some sort of gauge against that figure? That work is based—yes, you're right—from the existing homes alliance, but it's work that has been undertaken over a number of years led by WWF, and I think that figure is very much a baseline from where we want to work to. Yes, over a 10-year period, we would see that as a reasonable figure, but again, I think that the non-domestic sector is one where it may bring in more. It depends how far we want to go there in terms of raising their levels of energy efficiency. What we don't have is—we've got a figure there, but what we don't have is the Government's direction of travel, so we might be basing that on all homes being a D, but if we're to address climate change and energy efficiency, all homes might need to be a B, in which case that figure would need to be reexamined. It's based on what we believe we can get to, but in terms of climate change, we may need to set our sites much higher than that. Just in terms of the income aspect of fuel poverty, would you be looking to see any specific measures in the coming budget that will look to mitigate the impact of welfare reform on people living in fuel poverty? Yes, I think that we've already seen some money towards that to support the bedroom tax, and I would like to see that continue. One of the things that we would like to see is the headline of £119 million. There's about £9 million of that goes to Home Energy Scotland. What we don't see is funding for the things that Heather McAulain and Stuart Wilson were talking about, the local networks that are doing the handhold and moving into people's homes. It would be exceptionally helpful to recognise the impact that they have on money set aside in the budget, not only to support Home Energy Scotland, which does a magnificent job, but also to support the local groups who are driving that in a much more focused way locally. I just said that whilst it won't be this year, and I fully accept that, I think that we've got to look past this year's budget to the expectations of the Smith commission proposals. I will certainly, in my group, be looking at how we might best deploy the resources that may be bested in Scotland to tackle this job, which is a substantial amount of money that we may wish to consider spending differently. If I can respond to one of the points that Norry makes, I think that the thing about local trusted intermediaries and showing that they have been effective is that there are umpteen bits of evidence out there to show that that works really well. One of the pieces of the jigsaw that isn't there at the moment is that. Home Energy Scotland has got that on a very limited basis for very specific roles, but it's not the roles that we've been talking about this morning. The point that Norry makes about on-the-ground infrastructure that's already there and works, but struggles to get the funding. Even a small amount of budget was a set aside for that, it would make a huge difference again to how people operate their own homes. In addition to that, the other part about looking beyond the one-year budget as an advisor as well as installers in the local supply chain, the local supply chains hate spikes. They like continuity of delivery and if you're looking at one-year budgets you tend to go and it makes it very difficult for that local supply chain, particularly in the rural areas, where there will be an exodus out of the supply chain when you hit that trough in the profile. So you have to try and get a smoother profile for the funding programmes when they get put out there rather than having the one-year budget trying to aim for the three-year, five-year budget process, because that's how you improve the industry and build up capacity in those local areas. When Fergus Ewing gave evidence to the committee on energy, on our inquiry into energy, he indicated that the Scottish Government was positive towards district heating. I'd just like the views of witnesses in relation to this forthcoming budget. Should we see something to give substance to that commitment, what difference would it make to fuel poverty, can it tackle fuel poverty and climate change simultaneously, particularly in urban Scotland? I'd be interested in the views of witnesses on district heating and what might be done in that area. We've got, as a means of achieving SHQS, a Scottish housing quality standard for our stock. Our multi-stories presented something of a dilemma and, because of the availability at the time of CESP funding that Stuart mentioned, we were able to install district heating at 10 of the 11 maltes. The 11th did not fall into one of the lowest areas in the SIMD, so that's why that one's missed out. Ours is simple. It's got gas fire district heating, no element of CHP or renewables, tenants of it, the fuel bills have been slashed. We have some operational, some technical difficulties that we've inherited from the install, which are ours to fix. In general terms, I would say yes to district heating, but as far as Dundee District Council housing department is concerned, we've gone as far as we can go. I now sit on corporate groups where we're trying to create networks in the city, which would make our domestic schemes more efficient. I understand that there's been something that's gone out to planning departments recently, and we've now found planners coming along to these meetings, and I think they might be the key to getting things done locally. The other thing is, I think, that heaps will transmogrify into seeps over time, which will cover not just domestic but non-domestic. It's my understanding, although I don't think that this is cast in stone yet, that part of the bidding process for heaps next year will be looking for innovative pilots that start looking at that kind of integration of domestic and non-domestic schemes. I think that it needs to be a separate budget headline. I don't think that it can be put in with existing budget headlines. They are big projects. Lewis will be aware from living in Aberdeen of the Aberdeen heating power company that I've mentioned before to this committee. That was a big, big cost. To drop that into a heaps budget of £119 million, that would be two combined heat and power district heating schemes. We're talking really big costs here, so yes, it needs to have a separate budget headline. For many urban areas where we're trying to address that big cluster of homes done these, done it, Falkers done it, Aberdeen's done it, but the examples are fairly few and far between. We need to have more resources put into there. I know Edinburgh were in discussion with Edinburgh University on a new housing development to expand Edinburgh University's district heating scheme into the new housing. My understanding is that that didn't happen. I'm not sure whether that was down to resource or just the timing of it, but I think that we need to have a real look at that type of project when it doesn't happen. There are too many examples of failed work, for example. Too many examples of failed, not enough examples of very good practice. We need to do a lot more to do it when we need a separate budget headline, not as part of what we're trying to do just now. I think that there's the technology aspect here as well. If we look at district heating, if we look at things that should require some sort of pump priming or some sort of initial subsidy, the instability that we've seen with renewable heats, incentive, feeding tariffs—those have destabilised the opportunity at the moment for many public and private sector groups to come together and actually make some of this work. I think that again, this is another aspect that we've got to grab hold of and try to come up with what we need. In our rural communities, as well as for the urban environments, we've got lots of new opportunities we're seeing. Just the other week, the Government was publicising water source heat pumps, which again is a source of district heating, all of which, if we can actually stabilise the incentives and the programmes and people have confidence in them, then we'll get the investment. I've got three members still to come in. We are behind the clock, but unless you only need to rush away, we can run on for a few minutes more. Just very quickly to go back to priorities. The figures that we have been given showed the rise in fuel poverty between 2012 and 2013. The largest numerical increase was 34,000 among owned properties and owner-occupied properties. You talked about dealing with the most extreme cases earlier. I wondered what you thought about that in terms of how we prioritise money. If that is the fastest rising, and I've had discussions with WWF on that there is a problem with owner-occupied properties, on the other hand, are they the ones that are experiencing the most extreme levels of fuel poverty? Do you think that we're prioritising them enough? Should we be prioritising them more or less? The figures are slightly different in Dundee. I know that you're saying that owner-occupied sectors are on the rise. In Dundee, 49 per cent of the fuel poor houses, 33 per cent of owner-occupied fuel poor, 49 of social and 51 per cent of the private rented sector. Heaps are specifically for owner-occupiers in Dundee. We've taken a specific tack on it that owners fix himself houses amongst the poorest. We would never be able to insulate blocks of flats, our own flats, because of mixed tenure, so we've used heaps, which isn't really answering your question directly, but I'll just leave it there. The fuel poverty levels are so high that they're virtually the same between the owner-occupied stock and the housing association stock. The reason for that is that the housing association stock is probably better in terms of energy efficiency, but it's got lower incomes. Although the owner-occupied stock will be poorer in energy efficiency, it's slightly better in incomes, and it has a balancing effect. You tend to find that the fuel poverty levels are just very similar across the board, but by far the biggest portion of the stock is owner-occupied. It's all croft houses, generally, or that type of housing, so detached dwellings in a croft in the second. Rather than having rows of terraces, we just don't have that type of stock, really. It tends to be an equal measure, both in Norrmire and fuel poor, and we tend to be prioritising them. Our issue is that we've got extreme fuel poor at the same levels as the Scottish average for fuel poor, so it's just a different degree, I guess, when you go out to the islands. Not much to add. I think that we do recognise that money since 2001, the very first Scottish Government programme, the central heating programme, has been directed at the private sector and the private rented sector. We've put a lot of money there. I think that the energy access Scotland's view now is that we need to move not from just giving grants but also to try and enforce some regulation around the private and private rented sector, so that we can not just have that as an open drain where we're pouring money in, but we then start to increase the levels of energy efficiency in that sector and actually make people responsible for that. One of the difficulties in the very early programmes was that we gave people a central heating boiler, 10 years later we're going back to give them another boiler and another boiler, but we weren't passing on the responsibility and I think we need to be saying now, particularly in the private rented sector, that if you want to rent a house, if you want to put a house on the market for rent, then it's got to be some level of standard. We enforce that in social landlords to local authorities and housing associations. Why should a private landlord be any different? Why should you be renting a house that's substandard in terms of its energy efficiency from a landlord? Times come, we've put a lot of money into that sector, but the time has certainly come where we need to consider very carefully legislation around that. Thanks very much, that's very useful. I've just got one other question and a different subject, which Professor Sigurd mentioned was the Smith commission. I'm not on the devolution and further powers committee, so I'm just reading out briefing on the Smith commission proposals on supplier obligations in relation to energy efficiency and fuel poverty. It seems to me, for the average person in the street, very confusing about what it actually is. Professor, you were suggesting that it's going to make a big difference. Have any of the rest of the panel had any thoughts on these measures proposed by the Smith commission and whether they will make a big difference to what you're trying to do? Equals horrible. It's horrible. It's the most horrible administrative heavy system I've ever seen and for people like us at the delivery end trying to negotiate contracts with the utilities, it's just horrible. We've gone from a position with about 10 installers out doing things in people's homes to having two installers and just about having about six administrators now. It's crackers. The opportunity there is if you get control of how equal gets delivered is you can improve that vastly because the administration behind it is nuts at the moment where you're spending probably three times as much on administration as you are on the measure for simple measures. It's just daft and we just don't need to do that. I think if the Smith commission can obtain some of those powers to slightly change that, how that will work when it's a UK statutory instrument just now and how that will get broken down and how utilities then respond to that if you get different variations within the delivery, I won't hold my breath there. All I can say is it probably becoming even harder. Note that in the Scotland Bill it clauses 50 and 51, confirm that powers over equal implementation will be devolved but the Scottish ministers must first obtain consent to exercise these powers from the UK Secretary of State. Is that a concern? Yes, because at the moment how the portion of the money that comes from equal to Scotland, UK equal wide portion to Scotland, Scotland does reasonably better than maybe we had initially thought. So it comes down to the Scottish Government to negotiate with the UK Government about how that will split will happen with the pot of money that's there from equal initially and then how that pot of money gets applied in Scotland. But that pot of money in the first instance is key and we would argue that there are key drivers in Scotland that would justify the amount of money that we get at the moment to do with climate and rurality particularly that demands the bigger investment to tackle the same issue. So I think that has to be made forcially again but that's a negotiating position with the... Could I just say that the spectrum of opportunity is wider than just eco because there's a range of funds that I'm not saying we would use any differently but all I'm saying is the chance for us in Scotland to see the deployment of those funds as being satisfactory to how we see getting best value for our problems and our situations is what I believe would be the right outcome from that Smith development of the energy efficiency obligations. And what do you think about the consent that is required to be obtained from the Secretary of State? I thought there'd already been some discussion of that about not being unreasonably withheld. I think one of the things I would caution is this assumes that there will be a continuation of eco and by no means is that certain. I know there's a lot of lobbying to Westminster that by taking away the energy company obligation you will reduce the bills of people by £20, £30, £50. That in itself is true but if you remove that burden from the bills you also remove the opportunity for financial assistance to the people who need it most. So our view is eco should continue and I think that's something that we need to establish first and if it is to continue then I think the Scottish Government do have the opportunity to shape how it is and one of the things I would suggest that perhaps you consider is if we can move away from the carbon saving being the main driver then it does give us greater opportunity. Scotland produces or ornally produced I think 103 or 104 per cent of its total energy demand from renewable sources. Scotland's target for producing electricity from renewable sources is at very large. The question that I've got in terms of saving carbon, how many loffs would we need to insulate to save the carbon that something like white lease would save as a new energy generator? So we're already well ahead in terms of saving carbon from our generation. We don't need to be fixated on saving carbon from small, minor jobs. I think that Stuart Wilson had highlighted earlier is about the quality of life, increasing the energy efficiency of people's homes, not necessarily saving a huge amount of carbon. There will be carbon saving and I think that's the negotiation that we need to have that it's not solely focused. We've already seen the energy company obligations streamed into various areas and forgive me I've not got all of the acronyms but HECRO and CERO and a variety of other things that are not necessarily all focused solely on carbon. We've already created that precedent. I think that Scotland can create the precedent that it's about achieving better energy efficiency and not carbon saving. Apologies to the reporters for the acronyms. I think that you're going to be visiting the end of the session with a long list of acronyms to explain. Thank you. Do you want a limit? Thanks very much. There's a couple of brief points on the budget. We've heard that there's an instinct to invest in things that you get an easy hit from. Is the solution from that from the Scottish Government's point of view in your budgeting terms, in your view, to ring-fence within what is defined as a fuel poverty budget, both in terms of targeting groups but also in terms of the rural urban split? We've seen the heaps abs budget being spread across local authorities and a percentage of that budget is then held back. I think that it's around 30 per cent for local authorities to bid against. Rural local authorities actually do very well on that because they're able to demonstrate their ability to tackle fuel poor households, to address fuel poverty, to increase energy efficiency. While we're spreading that money out, although it's not specifically ring-fenced for rural local authorities, I know that they punch above their weight in terms of getting that money in. I think that you might have a difficult conversation with COSLA if you are looking to ring-fence particular parts of the budget, simply because an area is a rural area. If it was ring-fenced on levels of fuel poverty, then we could do something within the overall budget, but I wouldn't say that it should be spread across the whole budget. Do you think that it should be ring-fenced or that it should be division between measures to address fuel poverty and measures to address extreme fuel poverty, because the spike in extreme fuel poverty figures must be a concern? If we look at what we're doing just now as an area-based approach and local authorities will take an area, while three out of 10 houses that they address may not actually live in fuel poverty, the fact that they're preventing the house from getting fuel poverty or that household may be in fuel poverty next week, or the largest percentage of people in that area are living in fuel poverty, a lot of them are addressing it in that way just now. Is the area approach right? Yes, it is. Are we addressing the worst areas, while there's a highest percentage of fuel poverty? Yes, we are. Are we supporting people who may not be fuel poor but who might be on the edges of being fuel poor? The answer to that, again, is probably yes. We've probably got that just about right. It's down to local authorities to bring forward, based on their own local knowledge, the areas that they want to put that investment into, and indeed when they submit plans for funding to officials, that's the area that they've got to demonstrate. We're already moving in that direction and it may well be helpful in future in terms of reporting around the impact of those programmes for that type of thing to be drawn out and reported to this committee that I'm sure we'd wish to see just how wisely the money's been spent. I'll just go back on one point about that. In terms of the HEAPS programmes in the rural areas, clearly the rural areas made some lobbying to the Government about trying to up the contributions because of the disparity in costs when you get into the rural areas. The one thing I would say about that is that was welcome and it did help. However, when you come back to the energy efficiency of the home, you want to try and do the whole house approach rather than bits and bits and have to go back two years later to do another bit and another bit. The idea is to try and get the whole house approach and at the first visit when you first go there and deliver that whole house in terms of energy efficiency. For our stock, that means something like either internal wall or external wall coupled with room in the roof type insulation where you're doing the whole envelope. At that point, the transformation of the people's lives is enormous. If we could then recognise that within the HEAPS budget, and at the moment that's set at £9,000, the contribution, which seems high, but when you come to combined measures that might cost £20,000, or even higher in some instances, perhaps a slight movement in that would make a significant difference to be able to do that whole house approach, which we're struggling to do at the moment. Can I just also bring us back to the fourth issue that I think has come out very strongly in the whole of the discussion this morning about where advice and intermediaries that are trusted will help solve the fuel poverty problem? The issue about budgeting for that is that it's a joining-up issue. It's primary care, it's social care, it's the fuel poverty, the technical resource. I actually think that if that, because let's face it, the best bang for anybody's book is to go into a home and advise someone that they can actually save money by stopping doing things or using their energy differently. Those sort of, you've heard, that they're not fuel poverty people that do that, they're intermediaries who are in the home and with those people all the time, but how are you budget for that? I don't see necessarily being a fuel poverty allocation, it has to come in other parts of the budget that then join up to help address the problem. I was just going to ask about that. We've got three groups involved in fuel poverty, but a lot of what's been talked about today is people who are living in poverty, who then some of them will fall into fuel poverty category. For example, in Glasgow, because of stock transfer, if you're in a socially rented house, you're more likely to be in an energy efficient house than if you're in a private rent sector or own an ex-counselhouse. What work is done at government level to bring you in to the Government's anti-poverty strategy so that you're dealing, you're not looking at somebody saying that their house is cold, you're looking at somebody who is poor and part of it is their house is cold, but they're also more likely to be ill. Are you linked in to the development of the Scottish Government's anti-poverty strategy and the budget decisions that come from that? We invest in addressing poverty by investing in intermediaries in the voluntary sector, whatever, who do fuel poverty advice, but they might do other advice, too. I think that that happens at a number of levels and certainly the fuel poverty forum as a single unit before it recently was given these new duties has been looking and particularly with primary healthcare, we've got some very interested and active people now in the forum that are working on the health and social care front and these are people that are well known to people like Heather and others who in the local authorities are actually delivering on the ground. So it's starting to emerge, I just think we need to do a lot more. Track, for example, of voluntary sector organisations, the funding for that in the budget is reducing, that might have an impact on the capacity to deliver advice around fuel poverty. It may well, and it's why that mapping that I mentioned, which certainly Mr Neil is aware of and because I passed it to him, I think that it's that sort of thing that will identify strategically where the joint should be, but the reality has to come on the ground and all that has to join up. I think that the policy level of the health and social care integration agenda and the new bodies that have been effectively set up to drive that forward can be key in that as well and linking in there. Again, using services that are already on the ground rather than reinventing the wheel where you've got services that are on the ground delivering in people's homes, the most vulnerable, probably all the people who are fuel poor, it's a try and identify them with them, that policy and then putting drivers there for those policy makers to build them into their strategies, which they're doing right at this point in time. People like the care and repair services throughout Scotland are there or are ideal placed to run that type of thing, so it's trying to get them built into those strategies that are already getting put in place. One of the things that's happening in Glasgow, and it's starting in Glasgow but hopefully will be rolled out, is a programme called the Lynx Workers Project, where a number of doctor surgeries have benefit advisers within the surgery, so if the doctor and it spawned out of a very good report called GPs at the deep end and those deprived communities, the doctor has access to a benefits adviser. The doctor won't, in terms of seeing someone who they believe would benefit from that, additional advice and support will refer on to a colleague, so you go for your doctor's appointment but you also see someone who can support you in a wide variety of things, and it's that type of joined up approach that we're actually starting to see, as Stuart said, what we do need to do is find out how well that's worked and if it has worked then build that into the health and social care budget, not just as a fuel poverty alleviation but very much around preventative medicine and good health care. For the life of me, I can't remember that I can remember for this hub that exists in Dundee, but it's all the voluntary agencies come together on a site in the cross-refer, so they're all aware of what each other do, what specific aspect of poverty that they're specialists in, as I say, the cross-refer. It doesn't cost anything really and it develops itself over time. One contact leads to another. Thank you. My apologies for missing the start of the meeting. I just wanted to ask you two very quick questions. I don't know if the answers will be quick, but we're in a situation where the Scottish Government's fuel poverty budget has doubled since 2008, yet we've seen the proportion of people in fuel poverty increasing. Necessarily throwing money at it isn't going to be the right answer. My question is, we've talked about the four factors that influence fuel poverty, which are fuel price, household income, energy efficiency and energy usage. What is the number one key factor in driving energy fuel poverty? Secondly, debt released figures fairly recently of a comparison across Europe, which highlighted that pre-tax, electricity prices were the highest in Europe and Britain, and gas was amongst the highest in Britain. What's driving that, and is there anything that can be done either at UK or Scottish Government level to address that problem? If I start and say, it's got to be fabric first. Had the Scottish Government not put money into its energy efficiency programmes, fuel poverty would have been significantly higher, so we know that that approach works. If theoretically your fuel bill is £2,000 and you have a 20 per cent increase, that's quite a lot to take. If your fuel bill's £300 and you get a 20 per cent increase, that's less of a hit. What we've got to do is ensure that all homes are made as energy efficient as possible. It does two things. Future proofs you against the shocks of big rises but also contributes to climate change. Fabric first has got to be a good way of doing that. Not much point to put a heating system into somebody's house if the fabric leaks. We've seen some stuff in Orkney where you can put your hands round the outside door because the frame is just hanging on. A new heating system in a house like that, the heat is just coming out. Fabric first works. We know that because had the Scottish Government not continued to fund those programmes, fuel poverty would have been much higher. Energy prices are high. We import a lot of our energy now that we didn't do before. Fabric first reduced the demand for important energy, which will help. One of the things that the competition markets authority looked at was the wholesale market. If you think of the cost of your gas or electricity, almost 50 per cent of that cost is the wholesale cost of gas or electricity. You need to look at other markets to see if that's a comparable cost. My suggestion would be that that market doesn't work for British consumers. We've got a wholesale cost that's exceptionally high and that continues to push our prices up. 50 per cent of your bill on the wholesale cost and there's not much that I can use a customer can do about that 50 per cent. You can move your supplier but your supplier's still buying from the same pool. CMA will be reporting later, potentially not this year but in the spring of next year. I would hope that they would have something to say about the wholesale market. I totally agree. Fabric first's most sensible approach. Transparency in bills that we talked about earlier helps people to switch. At the moment you think of some of the distribution costs that are on bills, they're weighted towards rural Scotland. We would argue for a fairer spread of that. Local delivery chains went for the delivery of those schemes because that keeps money in the local area that helps to alleviate fuel poverty. It's about trying to get local supply chains. In simplistic terms, we're throwing money at fuel poverty measures. Fuel poverty is going up why did we bother? In Dundee in the last year we've externally insulated about 800 houses and we'll hopefully continue to do that. Stewart said that it equals horrible. I would say that heaps is fantastic. We've got whole estates that are transformed. They're regenerated because of the outward appearance which isn't strictly anything to do with energy efficiency but that's the added value. We've got people who, if they're not out of fuel poverty, they're certainly warmer for the same amount of money. We're able to do other works while scaffolding is up for the ex-EWI, which has economies. We've got local labour, so there's win-win-win there. I'm not dissing heaps for a minute. Okay, right. Thank you all. We have run considerably over time, but that just indicates the committee's interest in the subjects. There's been a very useful session and we appreciate you all coming along and helping us. We will now have a brief suspension to allow a change of work. Okay, if we can reconvene, we're now on item 5 on the agenda and a slight change of topic. We're back to our inquiry on to work, wages and wellbeing in the Scottish labour market. I'd like to welcome to give us evidence this morning a familiar face from any of us, Karen Whitefield, who's campaign officer at Azdo, the Shot Workers Union. Welcome. I think we're going to run this probably for about 45 minutes, I think. If I could remind members if they would keep their questions short and to the point, and answers as short and to the point would be helpful in getting through the topics. We want to discuss the time available. I would like to maybe just start off and ask you about the work of the fair work convention that's been established by the Scottish Government. From your perspective, from the union's perspective, what would you like to see be the outcome from that? What would you like to see in the framework and how do you see the role of that convention developing? We welcome the establishment of the fair work initiative by the Scottish Government. We would like to see good engagement with all trade unions, particularly for the Scottish Government to recognise the difference between those trade unions that operate in the public sector and for those of us who operate entirely in the private sector, because there are different challenges there. I recognise that the Scottish Government has invited a number of trade union representatives to sit on their panel. Many of them will come from a public sector background, and I would just ask that we get an opportunity to make representations. We would want them to say something in their findings about pay, but we would want them to remember that the rates of pay are not the only issue to tackling poverty, particularly in work poverty. You will have seen in the media that there have been lots of discussion about some retailers paying the living wage. We would welcome that if you are on a short-term contract or only have a six-hour contract, whether your employer is paying you the living wage or not is not going to address whether you are living in poverty and working. We would want them to address some of those issues. Remember, it is not just simply about pay to look at the wider terms and conditions and also to be setting an example about the importance of trade unions and the valuable role they can play in the workplace to ensuring that there is good industrial relations. They are not a threat, they are not there to intimidate, they are there to work in a spirit of partnership. As you are talking about pay, do you have a sense across the retail sector in very rough terms what sort of percentages of employees would be paid more or less than the living wage? For example, we know right now that there are 1.5 million people who are currently being paid a higher rate of pay than the national minimum wage, as it has just been increased in October, but for whom we will receive no benefit for the increase that the Government is going to make to the national living wage that is introduced next year. Those are people who are being paid more than the £7.20 right now rate but are not being paid what we would consider to be the national living wage that is being argued for by the living wage foundation. There is 1.5 million of those people, for example. 1.5 million altogether, 1.5 million in the retail industry? No, it is 1.5 million altogether. Altogether, okay. Do you know how many are in the retail industry? No. Okay, thanks. I will bring in Gordon MacDonald. Thank you very much, convener. Just on that topic of living wage, we have obviously had announcements recently from one discount or another supermarket chain that they are going to start to pay the living wage. I had discussions recently with one of the other large supermarket chains who said that they would quite happily introduce the living wage, but what effect that would have would be that they would no longer pay breaks, they would no longer pay bonuses to their staff, and the staff discounts that they give for in-store purchases would be removed as well. In terms of your members, what is better, that they pay the living wage or they get these other perks? How do you balance that? It would be great to get everything, but what is the preference in terms of your membership? I think probably, as a trade unionist, it has come as no surprise to you that I would say that we would want both and we would argue for both, but we are also realistic. I think that you need a combination of both. Fundamentally, we will always argue and campaign for greater basic rates of pay for our members. That is why we exist. It is what we do. It is one of the main reasons that we are there to support our members. However, if we are serious about tackling in-work poverty, it is not simply about the rate of pay. It is about your terms and conditions. It is about those breaks. It is about paid holidays. It is about sick pay when you are ill or injured at work. It is about what help you get if you are the victim of a violent crime, simply for doing your job. Those discounts that our members are interested in, you might be surprised to learn that we surveyed our members and us door regularly communicate with our members to make sure that we know what is important to them. The majority of them said that they would be very concerned if they were to lose the discount schemes that they benefit from their employer, because it makes a difference to them and it is something that they value and they would want to hold on to. I regularly, when I am out and about, see the placard saying that some retailers who do not recognise trade unions are proud to be the first retailer to pay the living wage. How many staff do they have in those stores? How and what kind of contracts are those individuals on? Do they get a phone call in the morning just being told that they are needed today but they might not know if they are going to be needed tomorrow? There are real difficulties there for people about managing their family incomes and being able to live and survive. I support the fact that we need to roll out the living wage to the retail sector, but one of the pressures that I have heard from independent convenience store owners in my constituency is that they cannot afford to pay the living wage because they are under pressure from the multiples who are also moving into the convenience store market. So, what do we need to do in order to convince the independent sector that it is important that the living wage is paid? I think that sometimes we forget that we have not always even had a national minimum wage in this country and that is always instrumental in arguing for the creation of the national minimum wage. Many of you will remember that at the time when we were making those arguments that people said that a national minimum wage would be disastrous for the retail sector, that people could not afford to pay it and that there would be grave difficulties that people would lose their jobs. The reality is that when the national minimum wage was introduced, that doomsday did not happen. I think that it is about being realistic. There is no doubt that things are highly competitive in retail today, but I think that the suggestion that retailers could not afford to pay the national living wage is often a little bit pessimistic, given that the economy is showing signs of improvement and that we have had 29 months of consecutive month-on-month growth in retail sales across the United Kingdom. You have said that the economy has grown. By paying the living wage, it will increase the spend in people's pockets, which will have a knock-on effect on spending stores and supermarkets. Why do you think that that message has not gone through to the supermarket chains or the convenience store sector? Particularly in the convenience store, things in retail are changing and there are lots of the large retailers, particularly in food. The big four, the Tescos, the Morrisons, the Morrisons and the co-creatives of this world, are changing their focus. You probably have noticed that across the country there are very few new large store openings. They are moving into the convenience sector market and that is about competition. Those larger companies have the advantages of an economy of scale of purchasing goods for their large stores and their smaller stores in a way that some of the small independents do not have. That is why we do work with the Association of Convenience Stores on all sorts of issues and they are working with their members to support them and to deal with some of those challenges. One of the focuses of the inquiry is the impact of poor-quality work on the economy and people's individual health and the likelihood of whether they are working or not. From your written evidence, which I think was very useful, I wonder if you want to expand a bit on a couple of issues. First of all, in the question of zero hours, I was very struck by the evidence that talked about increased flexibility from the employer. Zero hours contracts are sold on the basis that is benefit to everybody because you have flexibility, but you are describing circumstances where people are expected to be available for long ways of time, even though they have only got a very short contract. Can you describe that? Is there any evidence that those kinds of contracts mean that people are falling out of employment and they are having to stop working? What are the consequences then? Retail was a sector that, historically, people entered because it was seen as being family and friendly and they could manage working around family commitments or caring commitments. That is, by and large, still an incentive for many people who work in retail to stay there. Increasingly, the nature of retail and the competitiveness of the market has introduced changes. There has always been flexibility, but we now have a culture of 24-7 shopping. Retailers are trying to cut their margins by ensuring that they only have staff in store when they absolutely need them, when they know that they are going to be at their busiest. Many of the large retailers are now using electronic scheduling, which maps out when the store is likely to be at its busiest. That is based on what has happened the previous week. Now, employees do not know any more than, often, a week in advance when they are required to work. That gives individuals a difficulty in trying to be able to plan to pick up their children from school or if they have an elderly relative that they look after or an extra neighbour that they keep an eye on. That gives them difficulties. The flexibility is becoming a little bit, in our opinion, too much tilted towards the employer rather than the individual. All of our members accept that they need to be flexible, but many of them are being asked to be flexible within a growing window of time. They might have a 16-hour contract or a 20-hour contract a week. We hope that they will work those hours during the school day or in the evenings, but all of a sudden, they are learning that they have to be available between 6am and midnight. They could be asked at any point in the next week to work at any time in those time frames. That makes life difficult for people. The committee specifically asked us about experiences. You will see that there is a case study about a woman called Sandra. Sandra consented to being able to talk to the committee about her experience. Sandra has worked in retail since she left school. She worked for a large retailer that had a store closure last October. She had one of those contracts where she worked full-time hours and she generally worked during the day. She cares for her elderly mother who is in her 80s. She was unemployed for a couple of months and got another job with another retailer. The flexibility—she is desperate to work, she wants work, she cannot afford not to work—but the flexibility being demanded by that employer has given her difficulties because she was not required to make herself available from 6am to midnight. She needs to give her mother her medication and put her to bed. After six weeks of trying this, her mother's health was deteriorating. She had asked her employer if she could be flexible from 6am to 9pm. The manager said, well, I cannot give you special treatment and we do need to recognise that there is massive pressure on managers in retail to manage the schedules. She has been forced to give up that job because she just could not balance caring for her mum and the job. She is waiting to hear if she is going to be sanctioned because she voluntarily gave up that job. She did not want to stop working, she wants to work, but that is the dilemma for somebody in that position. We end up in the position for somebody who is qualified to do the job that falls out of work. It might be something that we want to go back and look at because we raised with DWP whether there were sanctioning people on the basis of an unreasonable demand in their work. I would be useful to know that kind of experience of having to be available between 6am to 9am and midnight, how prevalent that is in the sector. Are there circumstances where employers in retail recognise that and will always ring fence a bit of time that they do not have to be flexible? Are there good examples of good practice in that regard? Certainly, with the employers that we work with, they all have partnership agreements with us, which gives us an opportunity to raise with them changing core hours. It used to be the case that often employers would not expect their employees to change their hours any more than once a year. Increasingly, they expect their employees to consult with the trade union on changing their hours much more regularly, often two or three times a year. There is growing uncertainty, and there is growing pressure on managers to manage those schedules. That is a concern for us as well as a union, because those managers are our members as well. We have a duty to take care of care to protect them. There needs to be a recognition that employers must have good work-life balance role models, particularly in their management teams, and that is not always there at the moment. Good morning. A retail is extremely important for some of our rural communities in terms of sustainability of our rural communities. We note from your submission the flexibility that perhaps is not quite as available now as was a few years ago. Within the rural areas, there are a lot of people working part-time, and there are very small shops in some respects, such as 123 employees. What is your relationship with the FSB in trying to ensure that sustainability is there? Obviously, people working in the industry have a good deal in terms of their wage and their flexibility, and we relate that to a person's wellbeing and the overall wellbeing of that community. It is important to note that, in retail, 60 per cent of retail employees in Scotland are part-time, and that is higher than the rest of the United Kingdom. That is probably for some of the reasons that you have suggested, Mr Robertson, about the nature of Scotland being slightly different from the rest of the United Kingdom and having more rural communities with smaller towns and villages and smaller shops. I am not aware of us having a great deal of contact with the Federation of Small Business. We tend to organise in the larger organisations and multinational companies that operate across the United Kingdom. Our connections tend to be with the British Retail Consortium and the Scottish Retail Consortium, which I am sure have discussions regularly with the FSB. We also speak regularly to the association of convenience stores, which support small convenience stores across the country. We are heavily involved with ECS right now in our Keep Sunday special campaign, which predominantly is a bit England and Wales, but I will say that it affects Scotland because Scottish shop workers get a Sunday premium, which might be at risk if Sunday trading becomes just like any other day across the rest of the UK. Are you aware of union membership in the rural communities in Scotland? Talking about towns and villages, is there a high membership or is it a fairly significant low membership in the unions? No, we have membership in every part of the country and in our rural communities and our island communities. It varies from constituency to constituency, as you would expect. There is higher density in some parts of Scotland and others, but that is possible because there is higher density of retail facilities in some parts of Scotland. Usdaw does not see any community as a no-go one. We would want all retail employees to take advantage of being a member of a trade union, because there are distinct benefits from being part of a trade union. It is just about the flexibility of contracts. You have mentioned that 60 per cent of people have probably worked part-time, and that is to manage the caring facilities that you have mentioned. Do you see an advantage of people going into permanent contracts, rather than just the flexibility of having stated hours? Or is the flexibility something that you would continue to support in terms of individual workers and their specific needs? I think that we need to recognise that there has to be flexibility for the employer, but there also has to be flexibility for the employee. Where we need to be careful is that we do not arrive at a situation in which there is no certainty about hours worked, and that is increasingly what is changing in retail, that people may well have. It is not about necessarily always wanting to work part-time, it is about having no choice. There are no additional hours there. You might be willing to work full-time, but they are not on offer. Increasingly, employers instead of offering full-time contracts offer short-hours contracts, rather than part-time contracts, short-hours contracts, and then they ask their employees to work extra hours. There are difficulties with that for the employee, because there is no certainty or guarantee of income. They may well work regularly 30 hours a week, but they do not in actual fact know from week to week how many hours they are going to work. They do not therefore know how much money they have got. That gives them difficulties in securing a loan to buy a new car, whether it is to get their first foot in the mortgage ladder and buy a house, which we think should be the aspiration of all workers, if that is what they choose to do. There are difficulties there, if you have a short-hours contract, but regularly working full-time hours. We would argue that that is an issue that the Government has an obligation to address around contractual hours. That is why we are against zero-hours contracts, and we also argue that short-hours contracts are as pernicious as zero-hours contracts. Our evidence for this inquiry has shown that trade union membership and societies that have got high levels of trade union membership have better paying conditions for workers, which would seem self-evident, but it is quite interesting because it is important as set in a living wage in some countries. In your written evidence, you talk about organising and the difficulty of recruiting, and you say that you have got to recruit in Scotland 9,000 new members every year just to stand still. What are the barriers to recruiting in your sector and how could you organise more effectively? This is membership week for us. We have a number of membership weeks across the country, as we speak. We have our full-time officials and our organising officers and our reps in stores selling the advantages of being a member of a trade union and particularly a stall. You are right that we have to recruit 9,000 new members annually in Scotland alone just to stand still. We have 70,000 new members across the whole of the United Kingdom, but, despite that, we are the fastest-growing union in the TUC. We have grown our membership by 17 per cent in the past five years, which is a pretty remarkable achievement. There are barriers. Low pay is undoubtedly an issue. If you are struggling to make ends meet, even though our membership rates are pretty competitive, just having to pay £9 a month is money that you think, well, actually, I could do something else with that. Short-air contracts, again, if people think that they are not going to be there for very long, they might think, well, what is the point of joining? I only plan to be here for a certain amount of time. I think that there are more and more people moving into retail who perhaps never saw that as their permanent career path. They were doing something else before they were made redundant and have moved into retail, so they might think that they are not going to stay there, so they are not ready to join the trade union because they think that they are moving on somewhere else. That turns out not often to be the case after five or six years, so it is our responsibility to encourage them to join the union whilst they are there. One of the reasons that we have successfully grown our membership is because we have invested in training our network of volunteer reps in store and in taking our volunteer reps out of store and bringing them to work for the union for six months. We have a training academy, which is all about organising and equipping our reps and preparing them for roles of leadership in the union. I think that the Scottish Government has recognised that it is important to learn from us a lot about how we recognise value and support our reps through training. For that reason, it is often the case that we spend and invest in our reps, and they get national accreditation for the skills and qualifications that they leave the academy with. Some of them do not always go on to work for us, so other unions pinch them because they are so well trained and they see the value that we have invested in them. In terms of the good work that you are doing, how is that going to be affected by the UK trade union bill? There is no doubt that the trade union bill is of great concern to all of us who value good industrial relations. There are lots of things that we could all list that are wrong with the trade union bill. It seems to me that there is a great deal of focus on strike action when us DAW members regularly go to work. I am not aware of us having too many retail strikes and living memory. I am slightly concerned about the focus and the desire that the Government has to stop strike action in some industries. They seem to want to take a sledgehammer to industrial relations across all sectors as a consequence of that. Primarily for me, there are two things that the trade union bill will damage. It will mean that the partnership agreements that we currently have with our employers who are willing to talk to us before they take decisions about changes to terms and conditions and engage with us at an early stage before they go to talk to the membership so that we can ameliorate perhaps the effects of that. They will be under no obligation to do that any longer. In fact, it might well become that it is just no longer considered to even be good practice to do that stuff. I think that good industrial relations will be undermined and the workers will suffer as a result of that. It also seeks to prevent our members from having a political voice. Being a member of a trade union is not just about wages and conditions and the industrial bargaining. That is important and it is our core business, but it is also about a political voice as well. That is not about any party political persuasion of the Government. It is about sometimes we need to lobby on issues that affect our members. There are many members here across all parties who have supported us does freedom from fear campaign, which seeks to tackle violence to shop workers. I fear that the trade union bill will prevent us in the future having the ability to campaign effectively for political change and we will work with employers to ameliorate the effect of violence in store, but sometimes it requires political change and it is the right of a trade union to meet those arguments and the trade union bill. I fear risks damaging that ability to do that kind of campaigning work. Thanks very much. I think that Chick Brody wants to come in with that. Following up, John McAlpine's initial question. You deal largely with large retailers, which is a shame, because clearly we need to look after those that work in smaller businesses. Why are the benefits of union membership compared to other forms of collective bargaining and engagement, such as in John Lewis, for example? Why is John Lewis so successful? There are lots of companies that are successful, but some of the retailers that we work with argue that there are distinct benefits from being a member of a trade union. It is not just about your pay and conditions. John Lewis, why is John Lewis so successful and what benefits do you bring to the other large retailers? I heard John Lewis saying that it is a co-operative and that may well be one of the advantages, something that makes John Lewis's different from other retailers that sees that staff as partners not necessarily as employees, because they are working it together. Although I would point out that sometimes we talk about John Lewis's, but as a great success story, and I am not about to damage them, but there are other retailers that we work with who pay much higher rates of pay than John Lewis's, and perhaps that is because they recognise us, though that is the case. There are additional benefits from trade union membership other than pay. It is about access to legal services, support if you have an accident at work, death benefits, maternity grants—those are all benefits that you get from being a member of a trade union, in addition to any other worker. I support equity participation, co-operatives, collective bargaining and save employees in how they operate. You still have to answer the question of why John Lewis is so successful compared to some of the other retailers where there is union membership. It is not really for me to justify the success or otherwise of John Lewis. I would probably surprise you to learn that we have a number of members who work for John Lewis and the Waitrose organisation. Those members obviously choose to join us, though we do not have a recognition agreement with the company because they think that there are additional benefits to being a member of a trade union. That comes back to the point that, if they were to be sacked and need the services of an industrial tribunal right now, the trade union would be in a position to assist them with that. They also have a right to access their accident helpline. Obviously, despite the successes of the John Lewis partnership, some members of the staff still think that there is a benefit to being in the trade union. Thank you. Returning briefly to the actual subject of the inquiry, you talked a little bit about the living wage, the minimum wage and the UK Government's new policy of introducing what it calls a national living wage, an upper band for workers aged 25 and over on the minimum wage. You also talked about flexibility in the way that can often be abusive or manipulative. I would like to talk about the connection between those two themes. I have heard anecdotally people working in particularly larger retailers who find that, as they get older and as their minimum wage increases, because they are no longer on the under 21 or the under 18 band, they find that they get fewer hours or they get given hours that the employer knows won't work for them, that they are not going to be able to take or other ways of easing people out or freezing people out. Is that something that you recognise and do you anticipate it increasing, becoming a bigger problem as the gap between those age bands increases when this 25-year age band is introduced? I think you are right to identify that there is a problem there. As all, all have long campaigns against there being any age discrimination in terms of rates of ampy. You are doing the job whether you are 17, 18 or 25 or 30, 35. We are concerned about the new national living wages proposed by the Government and its distinction between those workers who are under 25 and over 20, 25. The retailers that we work with generally are part of our partnership agreements. We have eradicated differentials in rates of pay based on age. That is a benefit of the trade union. That is why we are there to argue against it. We believe that the proposals that the Government has brought forward are inherently unfair and wrong, and we will be campaigning against them because they will discriminate against individuals. We fear that employers increasingly will look to save money, to cut costs by employing younger people and making sure that they are never on a permanent contract, so that they can get rid of them when they get to the top end of the age scale. That is a real concern for us. Once the gap between the youngest and the oldest age bands is perhaps five pounds an hour, that could be the gap that we could be talking about. The incentive for employers to do that will be much greater than it is at present. Absolutely. Retail is very incredibly competitive. Retailers are always looking to cut their costs. If they give them that opportunity, they will use it. I have heard some of them openly arguing that that is what they are going to do, is trying to find ways to claw this money back from their employees once the so-called national living wage comes in. It is also one of the ways that employers get out of paying premiums as well that are part of contracts. Increasingly, they will take on new staff that is not a bit age. It is about taking on staff to work in bank holidays or on Sundays, or for holiday periods, so that they do not need to pay them time and a half. That is a concern, because it undermines the collective agreement that there should be premium pay for certain times of working on certain occasions. Just one last point, which is about this phrase that we have heard from the Scottish Government about exploitative zero-hours contracts. There has been some discussion at committee about what that means and how we can pin it down. The convener put that question to the First Minister at the convener's group just recently. The First Minister said that examples of when a zero-hours contract becomes exploitative is when employers deny workers regular or sufficient working hours or unfairly penalise workers for being unavailable for work or not accepting offers of work. Is that enough of a definition or does the exploitative use of zero-hours contract and other forms of contract go beyond just those practices? You mentioned short notice, for example, short notice periods about when someone is going to be offered hours. I think that the definition that the First Minister used is one that we could sign up to, and we do not have any difficulty with that. However, we would like it to go slightly further, because we would like it to recognise the difficulties that are caused by short-hours contracts and the issues around flexibility. Those two things are different, but they can cause equal difficulties for the employee. Partly keen to focus in on issues that affect the incomes of people and the security that people have. Clearly, one of the issues that we talked about this week has been tax credits. In your assessment, what difference does the availability of tax credits make to members of us or to people working in retail? What would the impact be of the abolition that has been proposed? What difference will a three-year delay in implementation of that make to members? I am sure that it will probably come as no surprise to you to know that I was always delighted by the decision of the House of Lords. We lobbied members of the House of Commons, and the House of Lords is very hard on that issue. Tax credits are very important to the majority of our members. Sometimes politicians become obsessed by talking about the living wage and the rates of pay and believing that if you pay the living wage, then we will eradicate poverty. The reality is that many of the people who would have been affected by the tax credit cuts are already being paid more than the figure that is proposed to be the national living wage, yet they are still struggling to get by. Some of that is about the hours they work, but some of them, and many of them, are working full-time hours. When it is suggested that they find extra hours, it is not really that simple. There is a case study in our written evidence about Mark and Agnes, both us doll members, who live in Port Glasgow. Some of you might, as well as having read the evidence, have seen Mark. He was on the front of the daily record a few weeks ago, in advance of the tax credit decision being taken in the House of Commons. Mark and Agnes work between them 60 hours a week. Mark is a delivery driver with a large retailer. His wife works as a checkout operator. They are not work shy, they are not lazy, they are going out to work every single day. The reality is that, for them, life is increasingly difficult. The cost of living has increased and their income has not. They are going to lose £2,100 if the tax credit changes as proposed go ahead. If they do not go ahead and the Government honour the decision taken in the House of Commons, that will most certainly give them and families like them a real respite and a bit of assistance in the short term. However, we need to address the wider issue of in-work poverty, and it is not simply about rates of pay. That is why tax credits are so valuable. I was particularly struck when you said that a majority of your members would be covered by this. A couple for whom £2,000 would presumably be a significant share or £2,100 would be a significant share of their income. That is what you are telling us, that people who are at the moment faced with financial challenges but are getting by will, in these circumstances, find it much harder to get by? Absolutely. Although the IFS has pointed out that there are 3 million working families going to be affected by the tax credit changes as proposed by the Government, there needs to be a recognition that 1.5 million of those families will have no ability to improve their outcomes and change their circumstances, because they are people who are not going to benefit from any increase to the national minimum wage as proposed by the Government, because they are already being paid. The Government makes changes to the basic rate of pay next year, but it does not affect them because they are already being paid an excessive rate of pay, but at the same time, they are going to lose their tax credits. On top of that, the clawback, so it is not just about taking away tax credits, the clawback to the tax credit is also going to increase, so that for every additional hour they work, if they are able to secure additional hours, for every pound they earn, the tax man is going to take 97 pounds of that pound back from them in clawback. How does that make any sense? That is why it needs to be recognised that the House of Lords was not just Labour members and Liberal Democrats who spoke out about what was being proposed. It was Conservatives as well who said, wait a minute, let's hold back, let's look at this and let's think about whether or not these changes are as they are being proposed to tax credits are the right thing to do. I am grateful to Lord Lawson and the other Tories who stood up and spoke out and said, let's wait a minute. You mentioned that wider efforts would be required to tackle in-work poverty, clearly the tax system and tax credits are part of that. Are there other measures that this committee should consider in our recommendations that are specifically around members of yours and other working people in poverty? I think that you want to be mindful that it is about rates of pay, it is about tax credits, it is about terms and conditions and it is a recognition of the value of those terms and conditions and sometimes the value and benefit of the schemes that some employers, whether they are in retail or in other fields, offer to their employees and the benefits, in-kind benefits that they generate for individuals. I never thought I'd hear the day Mrs Whitefield would be praising Tory peers in the House of Lords. Richard Lyon. I previously was a nurse of the member, I worked in the grocery trade from 1965 to 1980 as a grocery assistant manager, grocery manager, grocery departmental manager. Groceries changed in the last 35 years, I used to get a Wednesday off on a Saturday off and never worked a Sunday. Now it's 24-7 as you say, it's basically the same. Many of the questions I was going to ask already have been asked but one of the comments I'm going to make just in regards to the last comment you made, we're talking about an hourly wage, should we maybe not start now to talk about a national minimum weekly wage because even the hourly wage, if you multiply it by 35 hours a week, is under £300 a week which is not, you know, when you come down to paying your gas, your electric, the food bill, you've got two kids, you know, we've all been there at the end of the day is not a lot of money but that wasn't the question I was going to ask you. Are you? Just to throw a wobbler. Other than that, you spoke about companies and I have to say, as a Luzda member, during the time I was a Luzda member, as there was an excellent union, so you can take that back and have high praise for you. But is there any companies that are deliberately debarring you from actively recruiting, you maybe will not want to name them, or you may want to name them, are actively debarring you from recruiting members? You spoke about one company who say they're paying the living wage now but they actually don't like you in to get members, which I've found quite interesting a couple of minutes ago. I have noticed when I reviewed the evidence, Mr Lyle, that you've long campaigned and raised with all of your witnesses the issue about making sure that people have sufficient income to be able to survive and I do think that this is an issue that we do need to wrestle with and we do need to try and find a solution to make sure that work pays. That's all our members at the end of the day, all our members want is to be able to go out to work and for work to pay and to be able to look after their families and right now for many of them. That's a struggle and there isn't an easy solution to it and it's something that people will need to wrestle with. In relation to employers that don't recognise us, I don't think it's a secret that Lyle and Aldi don't recognise us, that doesn't stop us recruiting. There will have been activities probably if you passed any Aldi or Lyle across the country, there will have been us-daw members outside of those stores trying to recruit at some point this week and we do have members in those stores, which is why we are able to know generally what kind of terms and conditions people are working with. We think that it's regrettable that those employers don't always recognise a trade union because I think that there are genuine benefits for them as an employer that they would get if they were to recognise us, not just for the employee. We as a trade union will keep on working with all employers to try and get them to recognise us. The more members we have within their employees, the more likely it is for them to recognise us, which is one of the reasons that in recent years we have had pretty high profile campaigns in relation to Aldi Lyle and Marks and Spencer, so I'm eithan to add. Thank you very much, Gideon. Thank you very much. I think we're through our questions. Thank you very much, as what it feels for coming along to the committee this morning as we're very helpful. We will now suspend everything and go into private session.