 The next item of business is statement by Paul Wheelhouse on Energy Efficient Scotland. The minister will take questions at the end of his statement so there should be no interventions and interruptions. I call on Paul Wheelhouse at 10 minutes, please minister. Thank you, Presiding Officer. Today we published three consultation analysis reports for Energy Efficient Scotland, and this is an opportunity to update Parliament on that, our recent discussions and intended next steps. As we develop Energy Efficient Scotland, the Scottish Government is continuing to invest heavily. By the end of 2021, we will have allocated over £1 billion since 2009 on tackling fuel poverty and improving energy efficiency. Since 2008, one million measures have been delivered to a range of UK and Scottish programmes to over one million households. When scrutinising the draft climate change plan, Parliament asked the Scottish Government to set out a credible framework for decarbonising the heat supply. In May, we set out an ambitious yet credible plan to make our buildings more efficient. A plan that would make it the norm to invest in energy efficiency with the aim that all Scotland's homes should achieve at least EPC band C by 2040. Those proposals are just the first step. We will do more, but we are starting in the right place, focusing on energy efficiency. Many of those who responded to the recent consultation supported our proposals and agreed that a 2040 target is the right one. South Lanarkshire Council noted that, and I quote, the 2040 target allows 20 years to address building improvements that ought to provide sufficient time to plan for and fund any necessary improvements that were technically feasible and cost effective. However, I also know that there were those who shared a view with those in the chamber that an earlier target should be set, suggesting 2030, 2032 and 2035 as alternatives. Arguments can be made for going faster, but we are concerned that moving too quickly would not only increase and cause an inflationary effect on prices per intervention, but that would also potentially be detrimental to the Scottish economy in driving an increased need to import equipment and installers from outside Scotland rather than developing and growing locally based supply chains here at home. Our approach would better allow us to seize the opportunity for our local supply chain, bringing local economic and social benefits. It may also undermine public confidence if we were to move too fast. It is imperative that we have credible, deliverable proposals and can take the public with us. Let us not forget that, when combined with investment in our non-domestic premises, it is anticipated that total public, private and third sector investment will potentially reach £12 billion by 2040. In the recent progress report to the UK Committee on Climate Change, Praised Energy Efficient Scotland noting, and again I quote, the Scottish approach represents best practice in a number of areas, including setting standards well in advance, with a regulatory backstop for owner-occupied homes and a statutory underpinning. That provides a strong example of an effective policy package to drive emissions reductions and other outcomes, including fuel poverty. Those calling for an accelerated target have yet to set out an alternative credible delivery plan that overcomes the risks and missed opportunities. However, we recognise that there is support out there for faster action and we believe that it is only right that we consider that. As such, we will publish a consultation in January on how the programme could be accelerated and seeking views on the risks and how others believe that those can be overcome. Before I go on, I must mention fuel poverty and the important role that Energy Efficient Scotland will play. My colleague Kevin Stewart introduced the fuel poverty target definition in strategy Scotland, Bill in June, which sets a target that, by 2040, no more than 5 per cent of households are in fuel poverty. We are listening. For example, we have introduced new low-carbon heat and enabling measures into the warmer homes Scotland programme and we continue to pilot and discuss greater flexibilities with our rural and islands authorities to strengthen the design and delivery of their area-based schemes. I am also pleased to inform Parliament that next year Mr Stewart and I will begin work to prepare a suite of legislation to support the delivery of energy-efficient Scotland. That will include primary legislation, but given limited parliamentary time and the additional pressures being placed on committees by Brexit, we will, where appropriate, also look to use powers already available to the Scottish Government, for example, under the Climate Change Scotland Act 2009 and the Energy Act. In the new year, Kevin Stewart will publish draft regulations for minimum energy efficiency standards in the private rented sector, and we will look to introduce those to Parliament ahead of summer recess with the aim of those coming into force from 1 April 2020. I can confirm that my colleague Kevin Stewart will also bring forward proposals later next year, putting more meat on the bones for the owner-occupied sector in terms of the encouragement and mandatory phases that we have set out. To provide a strategic approach to energy-efficient Scotland, we have proposed that local authorities should produce local heat and energy efficiency strategies, or LHEs, for short. Those will be the foundation of energy-efficient Scotland at a local level, identifying opportunities for energy efficiency improvements and heat decarbonisation across Scotland. Having LHEs in place will help to de-risk investment by providing invaluable market information and give Scottish businesses the confidence to invest in people, skills and equipment, thereby giving a clear signal on the long-term commitment to energy-efficient Scotland. Due to the comprehensive picture that will be provided by LHEs and their benefits, we believe that it is optimal for delivery against our climate and economic objectives that LHEs should be placed on a statutory basis. I recognise that there are resource implications for that and that local authorities would require additional support. That is why I am committed, along with Kevin Stewart, to working with our partners COSLA and local authorities, and I will say more about that partnership later. To understand what support they need and enabling us to understand the circumstances in which LHEs could be most suitably placed on a statutory footing. We have already funded 23 local authorities to undertake LHEs pilot projects, and I am committed to supporting the remaining nine local authorities to undertake similar pilots. Alongside those pilots, which are crucial to learning for our future approach, we will shortly establish a working group to produce guidance on the development and implementation of LHEs with the intent of group reports in the first quarter of 2019. I briefly want to touch on the supply of low-carbon heat before coming on to my conclusion. Right now, the majority of our heat is supplies using carbon-based fuels, and we have a significant challenge ahead if 45 per cent of heat demand is to come from low-carbon fuels by 2032. It is vital that we consider the advice of the Committee on Climate Change and other experts as we respond to the challenge and to ensure that the deployment of low-carbon heat is consistent with the long-term decarbonisation goals, and that is why we are focusing on rolling out low-carbon heat, where it makes sense, regardless of long-term decisions. The Scottish Government currently runs a number of schemes to pilot, test and support low-carbon heat, including the low-carbon transition programme, the district heating loan fund and our Home Energy Scotland resource-efficient Scotland loan schemes. In order to prepare Scotland for life after the UK-wide renewable heat incentive, I can confirm that we will shortly be starting work to strengthen our policy framework for low-carbon heat. That will have a specific focus in off-gas areas and we will begin with a call for evidence to be published in early 2019, which will sit alongside and complement our work to develop a draft by R&G action plan. Whilst we further develop our policy on low-carbon heat, I can confirm that it is our intention to prepare legislation to introduce regulation and licensing for the district heating sector, which is a devolved responsibility. That regulation will be commensurate with the scale of this emerging market and I will shortly commission advisory group to inform the development of a licensing regime and associated licence conditions. Our leadership on this issue has been recognised by stakeholders here in Scotland and from further afield and the Competition and Markets Authority, a respected economic regulator, has agreed with our assessment that the market would benefit from regulation. We are also investigating the potential for granting permitted development rights in Wales, putting district heating developments on a similar footing with other utilities and, as part of January's consultation, we will seek evidence on whether further incentives can be made available to the sector within the constraints of competition and human rights laws. However, under the current devolution settlement, it is not within our gift to make consumer protection provisions to ensure that customers of heat networks receive the same protections as users of other utilities. However, I am having positive discussions with my counterpart Claire Perry, the UK's Minister of State for Energy and Clean Growth, as we look to agree how the CMA's recommendations can be implemented as a coherent package for the benefit of consumers, as is intended. I want to close today with an important note in partnership. Achieving our vision will require the Scottish Government to work in partnership with a variety of sectors and organisations. As I mentioned earlier, local government is a key partner. Earlier this month, I met with councillors Heddle and with him. He calls us spokespeople on, respectively, environment and economy and community wellbeing to discuss local government's key role in steering the shape of and delivery of energy efficient Scotland. We have agreed to strengthen the partnership by establishing a high-level strategic group in order to embed our commitment to active partnership, shared risk and joint strategic decision making. In conclusion, let me be clear that any complaints that the Scottish Government is just kicking the can further down the road with more consultation cannot be further from the truth. While we work together to identify and plan for our transition to a low-carbon future, we are continuing to invest heavily to energy efficient Scotland. As I said earlier, by 2021, this Government will have allocated £1 billion to energy efficiency since 2009, with more than £500 million being spent in this parliamentary session alone. However, we have also an obligation to the people of Scotland to get this right, and that is why we are investing in maintaining and nurturing a dialogue with individuals, organisations, representatives of bodies and colleagues right across this chamber. I look forward to taking questions. The minister will now take questions on the issues that are raised in his statement, and I will allow around 20 minutes for that. Would members who wish to ask a question please press their request to speak buttons? I thank the cabinet secretary for advance sight of a statement, and I note members to my register of interests around renewable energy. It is with huge regret that, while the settled will of this Scottish Parliament on 10 May 2018 was to bring forward the target for all homes to reach EPCC rating from 2040 to 2030, yet again the SNP is choosing to ignore this chamber when it suits them. Perhaps when the cabinet secretary and Mr Stewart begin preparing their suite of legislation next year, they will do well to note the cross-party support for all the amendments lodged that day. Complaints that the Scottish Government are just kicking the can further down the road are exactly the truth with just more consultation and working groups. Under the fig leaf of inflationary prices, the truth is that this Government is going to commit households to a further decade of wasted energy and environmental costs. Can the cabinet secretary provide the evidence that his proposal is less detrimental than the one that is wished by this Parliament? Paul Wheelhouse, I thank Mr Burnett for his unintended promotion of me, but I do recognise that the other Parliament's vote in May was a significant one in the sense that we had a good debate around energy efficiency in Scotland route map. We have been consulting on that route map over the summer, and I would hope that Mr Burnett would recognise that we need to listen to the evidence that has been submitted to us. It is not universally accepted that the acceleration of the programme would be to the benefit of either the outcomes that are being sought or, indeed, the development of local supply chains. As I have said in my statement, there are fewer voices who have responded in the consultation to suggest that we should actually take the timescales that were originally set out as being the ones that we should pursue. We are clean, obviously, to launch a consultation in January to seek views from those around the chamber. I would welcome suggestions from Mr Burnett as to how we can accelerate to an earlier finish point with the programme. However, he must also recognise the implications that there would be for the inflation of individual interventions and households. It would drive up the cost if we had not got supply chain in place to respond over that timescale, and we also need to reflect the desire of local authorities and others to try to develop local economic opportunities, which I would think is something that he would welcome. It is also the case that this is not an isolation. We are continuing to invest heavily in our programmes in the area-based schemes that Mr Stewart leads on, or in the non-domestic estate where we are investing almost £30 million in his current year in non-domestic interventions. We are continuing to invest heavily £500 million over this lifetime in this Parliament. That is a significant public investment, a time when there is no equivalent scheme in England. I will point that out to Mr Burnett. Lewis MacDonald I thank the minister for the advance height of his statement. He started by saying that he was certain that 2040 was the right target date, but then said that he wanted to consult again just to be on the safe side. I wonder if he can confirm that further consultation will only consider bringing the target forward and not pushing it further back. He also proposes to put local heat and energy efficiency strategies on a statutory footing, but he did not say anything really about how those strategies would be supported. I welcome his commitment to talk to councils, but when will he be able to tell Parliament and councils what support will be there and what resources will be there to support those strategies? Thirdly, I welcome his commitment to our proposal to regulate district heating. I would ask him to confirm that that will enable district heating to be placed in local development plans. Finally, I think that the case for permitted development rights and wayleaves for district heating has already been made and made strongly. Can he undertake to conclude his investigation into that matter as rapidly as possible, so that those provisions are already in place before regulation and licensing of this sector begins? Thank you very much, Presiding Officer. I will try to get through these if I can. Certainly, in terms of the target date of 2040, we believe that 2040 is the right timescale, but we are trying to reflect the point that I am accused of not doing on the part of Mr Burnett is to reflect Parliament's sentiment on this and, indeed, other stakeholders who believe that we should be accelerating. We are going to consult and, if we can come forward with a credible way of doing that, that would be obviously the purpose of the consultation exercise. We do believe, though, that there are competing tensions here, that the faster you accelerate, the more difficult it is for the supply chain to respond if we have a long policy signal and provide commitment to delivering the regulatory framework and follow through on that. That provides a very stable basis for private business to invest and, bearing in mind, the total cost of the programme may be up to £12 billion. The Scottish Government or local government can afford to commit that kind of resource to the issue, but what we want to do is track it in and lever in as much private and third sector investment as we can. Those long-term certainty that is delivered to LHEs in particular would be very important in that process. The LHEs process, in which we are engaging with COSLA as a key partner in terms of delivering energy efficiency in Scotland, is to understand from them what it would take in terms of resource space to enable them to be able to deliver that. We recognise the resource challenges. That is a new responsibility. We do not have a bottomless pit of funding, as I am sure Mr Macdonald would acknowledge, but we want to have a sensible dialogue with our colleagues in COSLA and to date the discussions have been very constructive, so I welcome that. We are also looking at how we, in terms of providing the regulatory environment for district heating and tackling issues such as waylead, again provides investor confidence that they can deliver timescales cost effectively and reduce financial risk and also project delivery risk, which also helps with the cost of capital in terms of borrowing from the private sector projects. I am happy to engage with Mr Macdonald, I am sure that my colleagues, Mr Stewart, who leads on the planning matters and on the domestic front, would be keen to engage with Opposition spokespeople on how we can actually deliver a consensus on that. We will move to the open questions. There was a lot in those questions and answers. Can I ask members please to avoid statements and get straight to questions, because I have a lot of requests. Gail Ross, followed by Graham Simpson. Can the minister assure me that there will be a recognition of the different issues in rural areas and ensure flexibility and deliverability? I certainly can provide reassurance to Gail Ross. Our programmes already take account of the varying costs of delivering energy efficiency measures in rural areas and we are actively looking at where additional flexibility can be introduced. For example, recently introduced new measures to our warmer home Scotland scheme, including ground source heat pumps, microhydro, microwind, microchip, asbestos removal, installation of new and replacement LPG tanks and replacement of existing unsafe oil storage tanks. Those measures will be of clearly of particular help to households living in rural and island areas that are not served by the gas grid. As I mentioned earlier, we are trying to put a particular focus on helping those communities and individuals who are off the gas grid. We continue to work closely with local delivery partners and are listening to their ideas as well. I would also add from an island's perspective, we clearly are now in an environment where the island's act is now enforced and as we develop the island's community impact assessment tool between now and the second half of next year, we will hopefully be in a place to apply that to any of our future proposals and projects. Of course, the same goes for answers. Graham Simpson, followed by Alasdair Allan. Graham Simpson, if the Government is open to going faster quotes on meeting APC targets, is it also open to going faster on dealing with fuel poverty than is suggested in the fuel poverty bill? Clearly, what we are trying to do through Energy Efficient Scotland's route map is to tackle energy efficiency as a driver for fuel poverty. While we are convinced that the timescales that we set out on the route map are the correct ones, we believe that they are right for the reasons that I have given earlier and I will not repeat those points. We are providing a consultation opportunity in January for those who have cut credible proposals about how we can deliver the programme faster to do so, and that would help to tackle fuel poverty if we were able to go faster than our plans outline. My colleagues, Mr Stewart and Ms Campbell have laid out a clear and focused approach to tackling fuel poverty and the fuel poverty targets bill, and they were focusing on, as I said in my statement, on providing a solution that would leave fewer than 5 per cent of households in fuel poverty by 2040. There are parallel strands of work, and we want to work with others in this chamber to tackle fuel poverty. Alasdair Allan, followed by Jackie Baillie. Will the minister agree that we need to tackle poor quality insulation installations from certain contractors claiming to be working under government or industry-funded schemes, sometimes leaving vulnerable householders with no paperwork and no proper recourse to have the damage to their property fixed? While those issues appear to be mainly associated with UK Government schemes, what more can the Scottish Government do to enhance consumer protection in this area? Dr Allan raises an extremely important point. I am at a reference to the issue about consumer protection in relation to district heating, but in terms of the wider investment that we are making as a Government, we agree that it is imperative to protect households when they are undertaking work to improve their homes to make them more energy efficient. We are, through Scottish Government-run energy efficiency schemes, already putting in place provisions to protect consumers. For example, the Warm Home Scotland contract requires installations to be completed to a high standard, and all measures are inspected to ensure that they are completed to a high standard, something that we wish was applicable in other schemes across the UK. For local authority area-based schemes, all authorities are required to provide a quality assurance service, including access to a formal complaints process on-site monitoring of the quality of the works and post-completion advice. We are learning lessons from previous schemes and have established a short-life working group on quality assurance, consumer protection and skills in the supply chain, which will report its recommendation shortly. Jackie Baillie, followed by Mark Ruskell. I declare in interest as the honorary vice president of energy action Scotland. The target is deeply unambitious. People are going to food banks right now, asking for cold bags because they cannot afford the fuel to cook a meal. Can the minister really ask them to wait until 2040 to put the cooker on? Why is the budget for energy efficiency just a quarter of what experts have said is required? Paul Wheelhouse, I think that just to put things in perspective, Presiding Officer, in this current year we are spending over £146 million on energy efficiency. That is not lacking ambition. That is actual delivery on the ground. So, in response to Jackie Baillie's point, I fully recognise that there are individuals that are in a difficult situation and clearly we want to try to help those individuals as soon as we can, but to give Jackie Baillie assurance that we are investing right now and we are continuing to invest throughout this Parliament in the schemes that are run through the air-based schemes that Mr Stewart leads on and also in terms of the wider tackling of poverty and proving the living conditions of the people of Scotland. However, we just gently suggest to Jackie Baillie not to scare monger on this. We are continuing to invest. Even though we are talking about a completion of a programme by 2040, we are prioritising in that route map tackling households and fuel poverty in the earliest phases of that, with the aim to get properties up to APC band B by 2040 for those individuals. Mark Ruskell, followed by Liam McArthur. Thank you. The UK Government has put in place 320 million over the next three years to ensure a steady pipeline of district heating projects, whereas in Scotland, 60 million must be shared between several types of renewable heat developments. Will the minister seek evidence on how a steady funding stream for district heating can be put in place as part of January's consultation? I certainly recognise the point that Mr Ruskell makes. Clearly it would be in everyone's interest if we were able to provide long-term certainty about funding. I know that the finance secretary, Mr Mackay, is looking at the issues around the number of strands of government funding to try to provide as much certainty going forward for investors and the public and third sectors. We certainly take that point seriously, when, obviously, in the context of the budget on 12 December, hopefully Mr Ruskell will be able to see more detail on those issues. Liam McArthur, followed by David Torrance. I thank the minister for his statement. The minister said that he is listening in relation to the issues around fuel poverty. Did he hear the strong criticism from those who gave evidence to the local government committee yesterday about the failure of ministers to include a rural minimum income standard in the new definition of rural fuel poverty and therefore risk to resources not being targeted to where they are most needed? Can he work with the housing minister to ensure that the bill is properly island-proof so that those resources go to places like Orkney that has the highest level of fuel poverty? Paul Wheelhouse. I recognise the importance of the issue, not just in my energy capacity, but also as island minister. Those issues have been raised before. I know that Mr Stewart and Ms Campbell are working very seriously to try to invest strongly in housing provision in the islands and to ensure that there is funding to tackle schemes through the area-based schemes and working with the island authorities to try to fine-tune those schemes to make sure that we are reflecting some of the dimensions locally that Mr McArthur raises. However, I would also point out that there is a high level of investment per intervention in each of the island areas. In fact, I do not want to play about it with numbers, but certainly each of the island authorities are happy to supply the information that Mr McArthur is receiving, which is a very generous contribution from the Scottish Government to support energy efficiency in the stock. Of course, there are a number of pressures in the island authorities that across Scotland are indeed affected by matters that are outwith our control. We can do what we can with the resources that we have and the policies that we have. We want to work with UK Government ministers to tackle fuel poverty, and we will certainly work with the member in tackling issues in Orkney Islands. David Torrance, followed by John Scott. Can the minister provide more detail on how a Government will work with local authorities to ensure that those ambitions are met? Local Government is a key partner. I have alluded to this in my statement in the respect of the delivery of energy-efficient Scotland. We already worked very closely with local authorities across Scotland for example in the delivery of our home energy efficiency programmes for Scotland area-based schemes and an energy-efficient Scotland transition programme. As I said in my statement, though, I recently met councillor Heddle and with him. He calls us spokespeople for environment, economy and community wellbeing and discussed the local government's role in delivering energy-efficient Scotland. There is a clear desire from those representatives of COSLA to have a genuine partnership and to work in jointly tailoring and designing the energy-efficient Scotland programme. We have agreed to strengthen our partnership and will establish a high-level strategic group that will embed our commitment to active partnership with local government, including shared risk and joint decision-making. John Scott, followed by Emma Harper. My apologies to colleagues for arriving late for the minister's statement. Thank you, Presiding Officer, for calling me nonetheless and declaring it an interest as a farmer as well. Notwithstanding the minister's assurances to Gail Ross, he will be aware that the energy-efficient Scotland route map does not adequately address the growing problems emerging in rural Scotland, where low energy-efficient housing stock creates fuel poverty and makes worse the growing mental health problems recently highlighted in the Ershire Post. What special measures are the cabinet secretary going to bring forward to deal with those interlinked and growing problems across rural Scotland that cannot wait until 2040 to be resolved? I am not sure whether Mr Scott caught that, but we are focusing on tackling off-gas grid areas, which is one of our key priorities. That has a strong impact on rural areas. I certainly give the member undertaking that we are listening very carefully on the route map, which was presented very much as an all-Scotland document, but it did not make specific reference to the rural dimension. We are clearly reflecting on that. Clearly, we had assumed 100 per cent to Scotland as covered by that programme, but we need to reflect the local context in rural areas and, as I outlined to Gail Ross, there are a number of ways in which we are doing that. I am happy to engage with the member on issues in South Ershire that affect his constituents, but I want to reassure him that we are very much focusing on tackling areas with high fuel poverty, many of them are rural areas, but we are also trying to tackle the particular context that rural areas face. Emma Harper is followed by Alex Rowley. To ask the minister how the plans announced support local economies and the development of supply chains. Presiding Officer, principally through Energy Efficiency Scotland, we are putting in place a framework of standards that is helping to make it the norm to invest in energy efficiency, which helps to drive the market. We are also proposing to help to create demand for energy efficiency improvements through the establishment of the local heat and energy efficiency strategy that is referred to. We believe strongly that, based on the feedback that we have had from businesses in supply chains, that will be extremely helpful in providing very invaluable market information. We are also helping to facilitate cross-border projects where we have two different local authorities. We know that in many areas such as Glasgow where we have suburbs that straddle the boundary, there may be proposals for local heat projects, district heating projects, which may require that structure to provide investor certainty. In reference to a point that was made earlier by Lewis MacDonald, which I failed to refer to, those documents could potentially have an important role in the planning process in providing a structure to inform planning decisions as well. The financial memorandum that accompanied the fuel poverty bill published in June only allows for additional administration costs, yet we know that if we have to tackle the 24 per cent of households now in fuel poverty in Scotland, then that budget is likely to double. Will the minister look again at the financial memorandum that accompanies the fuel poverty bill and look at some realistic figures for tackling fuel poverty? Paul Wheelhouse, I would certainly direct Mr Rowley to engage with my colleague Kevin Stewart on issues regarding the fuel poverty bill itself, but on the issue that he raises about the costs perhaps in regards to the local heat and energy efficiency strategies, we are keen to have a dialogue representing that this is a new responsibility potential to be falling upon our partners in local government and want to have a genuine discussion with them about what the resource implications are, the balance between central and local resource that is required, smaller local authorities have faced greater challenge in delivering new functions, so we can take that into account in deciding what structures are in place for energy efficiency in Scotland and look at how we jointly govern that as well. John Mason, the minister has mentioned district heating, and I wonder if he can say how confident he thinks that he is based on the announcements that he has made today that the private sector will really move forward in more district heating, which we have not seen a huge amount of so far. Paul Wheelhouse, the member is absolutely right. We are learning from jurisdictions like Denmark where we have a memorandum of understanding with the Danish Government in that country that district heating forms over half the heating market and has taken some time to develop, so we can learn lessons from how they have achieved that. Realistically, in Scotland we believe that up to 20 per cent of housing stock may be suitable for district heating projects, and provision of local heat and energy efficiency strategies will send a really strong signal to the market about the investment opportunities by identifying those zones within each local authority that are most suitable for district heating to be delivered. In order to reduce barriers to development and provide conditions on the ground to grow the market, we are investigating how to put district heating on to the same footing as other utilities, for instance exploring, as I say, permitted development rights, and we leave issues as well. I understand from the market Scotland and London are way ahead in terms of their attractiveness to private investors, and I hope that that can continue. That concludes questions on the statement on energy efficiency Scotland. We managed to get all requests granted, and I thank everyone for the way that they conducted the session. I will take a few moments to change seats.