 Good morning, everyone. Welcome to the 16th meeting of the Net Zero Energy and Transport Committee for 2022, which today we are conducting in hybrid format. This meeting is being held in addition to our usual Tuesday morning meeting. We have apologies from Natalie Dawn, MSP, and I am pleased to welcome to the committee Eleanor Whitham, MSP, as Natalie's substitute. Good morning. At agenda item 1, we have consideration of whether to take agenda item 3 in private. Item 3 is consideration of an evidence heard this morning. Do we agree to take this in private? That is agreed, thank you very much. Our main agenda item today is an evidence session in relation to our inquiry into increasing energy prices. This inquiry is looking at the significant increase in energy prices, what is driving this, what impact this is having, and what can be done to alleviate the worst impacts. Yesterday, in relation to this inquiry, we heard from and today we are going to hear from the right honourable Greg Hans MP, Minister of State at the Department for Business, Energy and Industrial Strategy, who is joining us remotely. Good morning, minister. Welcome to the committee. Good morning, Mr Lockhart. I hope you can hear me fine. Yes, you are coming through loud and clear. Thank you very much for accepting our invitation and for giving your time to give evidence to the committee. We have allocated one hour for this session and I believe that you would like to begin by making an opening statement, Minister, so I will hand over to you. Thank you. Well, thank you, Mr Lockhart, and apologies for not being able to be with you in person. We're obviously debating the Queen's speech that we had yesterday here in Westminster, but I'm always pleased to be with the front of the Scottish Parliament. But let me say about your inquiry. The rise in energy prices has been driven by the global factors that have increased the price of wholesale gas. The UK Government absolutely gets that high energy prices are a key concern, and that is why we have taken the strong action that we have taken in the box. But this, I should add, has not had an impact on our energy security. Our new British energy security strategy puts renewed emphasis on supporting our North Sea oil and gas sector and making the transition to low-carbon alternatives, protecting 100,000 jobs in the sector, particularly in Scotland. In February, the chancellor announced a £9.1 billion package of support to health households with rising energy bills. This includes the energy bill support scheme, which will provide a £200 bill reduction to domestic electricity customers bills on October 2022. The scheme will apply across England, Scotland and Wales. Households in Scotland will also benefit from the additional £296 million of support for the cost of living in Barnett consequentials, including health for high energy costs on top of the record £41 billion annual settlement announced at the spending review for Scotland, the largest settlement since devolution. Over the longer term, the UK Government, as set out in the British energy security strategy, is focused on replacements for fossil fuels that are reliable and do not expose us to the volatility of international commodity markets. We already have Europe's largest capacity in offshore wind, and we are going to quadruple that over the course of the next decade. We also have a big increase in our nuclear ambition to rise to 24 gigawatts by 2050, representing 25 per cent of our electricity outcomes. This, if I mis-locker, is all a major step towards delivering the Government's increased ambition on renewables and low-carbon generation, as well as energy security. We will continue to monitor the situation with high energy costs, particularly to the consumer and to businesses, and to consider how best to address the issue. We will go straight to questions. My first question relates to the energy supply companies that have left the market over the past 18 months. As you know, around 30 suppliers have left the market, and the supplier of the last resort process has added £2.8 billion to consumer bills, which, as you know, is on top of the increase in wholesale energy costs. We had off-gem at the committee yesterday. They indicated that this is the only mechanism that they have available to recover costs. What other tools has the UK Government considered could be available in this context? What other powers could be given to off-gem to mitigate the consumer costs of companies leaving the market? Thank you, Mr Scott. It's a very good question. I'm glad that off-gem is here before you to answer that, because, principally, solar is a matter for off-gem. The solar process has worked well. Overall, we've had a lot of customers transferred successfully. In fact, nobody has had any disruption in supply—2.5 million customers overall across the 28 solars. That has been a good and seamless process. In terms of reviewing or looking at in the future how these costs might be met, we do think at present that the solar process and how that has met socialising across customers is the best way, but I, of course, will continue to speak to off-gem to see if there might be better ways in the future. The solar process is working well. We saw a good competition in the market, and there are still around 30 energy suppliers in the market overall. That represents a good healthy level of competition, even after the number of companies that have left the market, particularly in the last quarter of last year. Thank you for that reply, minister. In other evidence that the committee has heard, there has been some speculation that the wholesale price of gas will remain high for the foreseeable future, for the reasons that you mentioned in your opening remarks and some global issues that are outside of our control. What action will the UK Government take if the wholesale price of gas remains high beyond 2023? For example, in the Queen's speech yesterday, there was confirmation that the price cap will be extended beyond 2023. I wonder if you could elaborate on other measures that the UK Government might consider if we are to see wholesale price gas prices being elevated for a particular period of time beyond the next 12 or 18 months? I think that the first thing that you might point out in the Queen's speech yesterday, we announced the energy security bill coming up, which will allow us to extend the existing price cap as an obligator to extend it, but it allows us to give it the powers to do so. The second thing that I will say is that it is very difficult to predict energy prices, as we have really seen in recent years. Typically, for example, the gas price in this country hovers between 50 to 60 p a firm, and that has been the case most of the last 25 years. However, the recent current price is around 180 p, so about three to four times the historic average. However, it did go as high as 700 p straight after the Russian invasion. I think that I will give you an idea of the volatility in particular of gas prices that we have. I think that we have to watch the market carefully. The price cap, as you know, gets reset every six months, if you might, lagged by two months. The price cap that will come in next October, the refreshed price cap, will be based on prices—it is calculated by offshore—but on prices between this February and this August. We are about halfway through that period at the moment. Prices that happened yesterday hit a recent low. The spot price was down to as low as 40 p a firm. The forward price was about 185 p a firm, which is relatively low by recent standards. I would say that it remains very volatile. The best thing, though, in answering questions about how structurally do we deal in the long term if there were to be a very extended period of elevated gas prices, is actually to be using less gas. That is why we have such an effective programme across the UK in moving into renewable energy. I mentioned in the opening statement having the largest-installed offshore wind capacity anywhere in Europe. We have bigger capacities in offshore wind, in solar, as you know, in the recent contracts with difference option. We also have separate costs for tidal energy. Scotland plays an vital role in delivering all of these forms of energy. Scotland's key role in this should also be acknowledged as an appearing in front of the Scottish Parliament stage. It would seem remiss not to mention the crucial role of Scotland, because all of our energy sources, including more traditional oil and gas, in answering the question of how structurally do we reduce dependence, is through renewables, through more nuclear, which will provide the base load in the future to make this less dependent on gas in particular? Let me bring out other members to explore some of these issues. First of all, Fiona Hyslop, to be followed by Monica Lennon. Oh, sorry, I think that Monica will come in first. Monica, over to you please. Oh, thank you, convener. That's very kind. Good morning, minister. Welcome to the committee. We all listened with interest to the Queen's speech to hear what the UK Government plans to do, because a couple of weeks ago, the committee heard from a fuel poverty charity, and they warned that unless the UK Government and the Scottish Government take more action, there will be a catastrophic loss of life this winter, so it is very serious. What many of us have heard in the Queen's speech is underwhelming, to say the least. There's no windfall tax on the unique profits of big companies. There's no suspension of VAT on the energy bills of ordinary people. Are those issues that you're going to take forward going to be an emergency budget? When you hear things like catastrophic loss of life, has the Government seen any modelling on that? What are your worst fears about this winter, minister? Thank you for those questions and a lot in those. Let me try and answer as best I can. First of all, I think that the action in the Queen's speech is building on action that we've already taken. The package of measures announced by the UK Chancellor on 3 February, the £9.1 billion package of action on bills, which I also mentioned in the opening speech. That's part of a £22 billion package overall this year to help households with the cost of living. We recognise that we cannot provide complete insulation for one of the better terms from these big rises, particularly the big rises in energy bills, but that is a very substantial package of measures. I think that the second thing that I would say is that, of course, not all those measures have actually come into effect yet. For example, the energy bills stabilisation measures don't start until October. They're designed to kick in at a time when energy use really starts to rise at the beginning of winter. It's work recognising that not all the measures that we've taken have yet taken effect. The council tax measures obviously took effect in England and the Department of Conservatives to Scotland from April. I think that we will continue to monitor the situation very closely. It's too early to tell what the price cap will look like from October, but that will be a key consideration of what actually will be prices that people will pay for energy from October. In terms of your other points, the windfall tax, it's worth bearing in mind that oil and gas companies, which provide, as you all know, a huge amount of employment, particularly in Scotland, around £100,000 a job. There's very much the belief of the chancellor of the matter of the taxation of the matter of the chancellor that a windfall tax would kill off investment, for example, in the North Sea, particularly from companies that are also using those processes to invest increasingly in renewables. Oil and gas companies already pay corporation tax at twice the rate of other companies that pay around £375 billion in taxation to the extractor of stints North Sea oil and gas that came on the street. We take the view that the windfall tax would be likely to kill off investment, cost jobs, particularly in Scotland, I might add. A particular time when we need, in particular, our gas production, UK, we benefit from producing 50 per cent of our gas needs. That's something that a lot of other European countries don't have. We are not dependent on Russia, for example, on the importation of gas, which is really fortuitous position, thanks to North Sea gas. I think that we need to make sure that we don't kill off investment, particularly at this time, of acute and heightened issues around energy security. I think that on VAT, if I might add, there would be a very untargeted approach to cut VAT on energy. What we have done has been a much more targeted approach to make sure that those most vulnerable benefit from the support that we've provided. For example, on tax, properties in bans A to D, at the less wealthy end of the spectrum, and the increase of, for example, the warhounds discount and other measures to really get money back into the pockets of those most vulnerable assets, whereas the VAT cut would be disproportionately benefiting a wealthier household. Perhaps the Government needs to listen more closely to what firms are saying a couple of weeks ago, Sheler on record, that they are quite comfortable about a windfall tax. Certainly more can be done, and instead of killing off investment, just to quote your words back, what we are hearing from charities, trade unions in Scotland, local volunteers and food banks, that the cost of living crisis is killing off people. With respect, we need to hear more from both your Government and the Exchequer of the Scottish Government what will be done. I know that you also have a responsibility for climate change, and we are looking at longer-term solutions as well. In your view, should the proposed jackdaw oil fields go ahead, is that the kind of investment that you want to support? Thank you. It is difficult for me to comment on a specific consent or a specific field, because jackdaw, for example, is being assessed by a group called Operator Government, which is within Bays, my partner, but operates independently. They do an independent environmental assessment. It is difficult for me to give, as the Minister, the early sight of something that operate is examined. But in general, I would say that we very much welcome increased investment at this time, particularly in gas, to make sure that we have security of supply. It would make absolutely no sense. I am sure that you would agree with me for us to be importing more oil and gas at this moment. We are making the transition so that we will use significantly less oil and gas. There still will be a role for oil and gas, even after 2050. The Climate Change Committee has agreed that. But for the present, the last thing that we want to be doing is importing more oil and gas, and what has become a highly competitive and highly expensive market, not least if we ended up importing more hydrocarbons from Russia, which is absolutely the worst choice. That is why we want to make sure that, in general, we are not commenting on a specific field that we support our North Sea oil and gas. I might add that the number of jobs that are attached to it, the 100,000 jobs, is a huge amount of that industry, of course, in Scotland, and mostly in the north-east of Scotland. It is really important that we help the industry to make the transition, not shutting it down. Extinction is not a good policy choice. Transition is the right policy choice, making sure that those highly skilled jobs in the workforce for oil and gas become transferred, over time, into lower carbon sectors, like offshore wind, like hydrogen production, for example. All of those different things that I know that North-East of Scotland will be a world leader in terms of offshore wind. That is why we are making the transition and making sure that investment goes in the near term. The last thing that I want to be doing is importing more volatile, expensive hydrocarbons, particularly from countries that are very friendly to the UK at the moment. I will hand back to the convener now in the interest of time, but we are dealing with a cost-of-living crisis and a climate crisis, and it seems like we have a business-as-usual approach, but I will hand back to you, convener. Thank you very much, Monica. Let me bring in Fiona Hyslop. Fiona, please. Yes, we have a climate crisis, but we have a cost-of-living crisis, which has been made worse by energy price increases. Minister, I am assuming that you take responsibility for protecting consumers from that severe energy price increase, which we have heard will fuel poverty even from the press cap increase that we have already seen. Therefore, there is a pressure in the short term for what action is required. Bearing in mind the UK's Office of Budget Responsibility indicated that there was a £20 billion headroom in the spring statement, what are you doing to press the Treasury and, indeed, other departments to provide support more immediately rather than to wait and see what happens after October to help to protect families? Well, thank you, Ms Hyslop. I thank you for that question. First of all, I think that fuel poverty is devolved, of course, but I think that, in terms of your question about what the UK Government is doing, we have already taken really substantial measures. What I was saying earlier is that not all of those measures have yet taken effect. It looks like we have a slight problem with the minister's connection. Minister, your screen froze slightly there for a second. Would you be able to go back a sentence, perhaps? Apologise to that. Yes, of course. Apologise to Mr Lockhart. Let me just rewind it by heading a little bit. The package of measures that was announced by the Chancellor of the Third Amendment was comprehensive. It is over £9.1 billion of support, £22 billion of support overall when you consider other measures like the universal credit taper change, the reduction in fuel duty, which is worth about £5 billion, the £5p of a litre of petrol and diesel, for example. It is a real practical measure of support for consumers. It would not be right to say, Ms Hyslop, that we are not taking action, but we have taken decisive action. We have also done things like increase the national living wage from £8.91 an hour to £9.50 an hour. It would make a real difference an extra £1,000 a year in the pockets of those who have worked in the national living wage. We already have taken decisive action. We do not rule out anything in the future, and we continue to talk to the Treasury all the time and other relevant Government departments, like the Department for Work and Pensions, making sure that support is good. Employment remains strong and robust right the way across the UK. We need to make sure that that continues to be the case. There has been a comprehensive response so far, but we will continue to look at the situation as to whether further action will be appropriate and necessary over the course of this year. The evidence that we have heard is that there should be a recognition of what action has been taken already, but rather than wait and see what happens in the autumn, measures can be put in now, as opposed to wait to the winter when we know that people will be absolutely suffering. That is the message that we have heard from our other witnesses, and we want to relay that to you. The other issue is about the energy market and how it has performed or has not performed. You seem to be quite optimistic about the state of it. That is not necessarily what we have heard from other witnesses, but, often, we have, from yesterday, quite clear that there are a number of measures that they would like to take into account. Your energy security bill seems more focused on supply security, as opposed to consumer protection. Will you be prepared to implement those measures that Ofgem are proposing, and they must have proposed to you to allow them to step in in certain areas to be more severe in ensuring that companies protect individual consumers and shift the balance between protecting to suppliers to protecting consumers? I think that those are really good questions. First, we work very closely with Ofgem. It is an independent regulator, but the Secretary of State and I meet with Ofgem pretty often. I say on average once a week in one context or another. We have a very good dialogue with Ofgem. I would not be right to say that the energy security bill, which has not yet been published, I might add, but the measures that have been announced yesterday will be in it. There are key measures there to protect consumers and to give Ofgem a stronger role. First, we already mentioned the extension of the price cap beyond its current and statutory 2023 limit. The second one will be more competition in onshore electricity networks. The third area is an area that has not been regulated by Ofgem before, and that is on the heat network. I forget which part of the list goes. Anybody who represents a more in-a-city area will have quite a few heat networks, and I am sure that you will in your constituency as well. Typically, things like mansion blocks and housing associations benefit from lower heating prices with a sort of economy of scale from a heat network, but they are currently unregulated. We will be giving Ofgem powers to regulate a heat network so that people feel that their heat network is overcharging them or charging them unreasonably. There are going to be quite a few practical ways in the energy security bill yet to be published, but we did publish from Gov.uk what the main measures or many of the main measures will be. There will be in that bill measures to A. protect consumers and B. give Ofgem more muscle when it comes to regulating some of these markets. Pass back now to the convener. We have a number of members and I know that you have a tight deadline as well minister. Thank you very much. If you want to next up is Liam Kerr. Let me bring in Liam. Thank you convener. Good morning minister. You said in your opening remarks minister that the rise in energy price was driven by wholesale gas, among other things. Given the current price spikes, do you think the marginal generation technology, which would be predominantly gas, should continue to set the price? Is there in fact a case for wholesale restructuring of the energy market? If so, what impact could that have on bills and how quickly? That's a very good question. It makes the point that it's quicker and better. We can't, if you like, create an energy market that isn't reflective of global or wholesale energy prices, but we can, if you like, influence it and try and change our energy supply mix. That, I think, is the priority. What we set out, for example, in the net zero strategy and in the British energy security strategy, and now in the energy security bill, is going to be increasing the move into renewables, making sure that we are less dependent on gas in the first place. We, A, have to look at our security supply at the moment and support that sector. That is a move that's going to take some time and has already been taken place. We've already got, as I mentioned, Europe's largest installed offshore wind capacity. We need to go further. That is why we're quadrupling over the course of this decade our amount of offshore wind. We need to make that move. That is also why we're moving decisively back into nuclear to make sure that we've got the base load when the wind isn't blowing, the sun isn't shining. Nuclear will also provide a big part of our energy mix. We're targeted in the energy security strategy nuclear being 25 per cent of our generation by the year 2050. If I might, Mr Kerr, just to delve for a moment, I'm just going to—what I will say to my Scottish minister in Delocavit is that it would be really helpful if the Scottish Government were to drop its ideological opposition to nuclear, because nuclear has got a fantastic track record in Scotland when the Huntersden power plant closed just before Christmas. That was an incredible success story. It generated zero carbon, low-cost electricity for every Scottish home equivalent for 32 years, I think, in the right sense there. It's a pity, I think, to see Scotland not participating thanks to the Scottish Government's approach to nuclear in our nuclear renaissance. I guess what I'm trying to say is that the best way to reduce the impact of gas prices on wholesale energy prices is to reduce our use of gas to do that, but with more renewables and more nuclear. Thank you for that slightly different side of things now. After so many new entrant failures, there's been a consolidation, of course, within the legacy suppliers, which can reduce competition and consumer choice. In your view, Minister, how can the UK Government ensure increased competition and, indeed, innovation, with the effect of ensuring value for money and also, of course, driving decarbonisation and net zero? Again, this is always a question of balance. More than 20 companies have left the market, particularly in the fourth quarter of last year. Equally, there are still 30 energy suppliers in the market. I think that provides a robust level of competition on energy supply. We also try to ensure good competition when it comes to electricity and energy generation. Our CFD options, if you like, put in the amount of government money, but make sure that not everybody wins. Not every project wins in a CFD option, so we create competition there between electricity generators as well. Making sure that this remains a strong, robust and competitive market is one of our key priorities. I think that the fact that 30 energy supply companies are unsatisfying with that is still providing a high level of competition. We would like to see more competition in some other parts of the market as well. On innovation, we have a really good innovative market. Companies are forward-looking, tech-savvy. Companies have quite a diversity of energy suppliers in the things that they are able or willing to offer their customers. Anything from companies that take on a large number of your bills beyond energy, there are companies with a large number of renewable only energy suppliers, there are energy suppliers that are more of a niche geography or a niche thing to sell. I think that there is good diversity in our energy suppliers. I am very innovative as well. We quite often see energy companies react well to government announcement. The UK Government is not able to step in and provide a good example of the heat pumps. It is not realistic for the government to come along and give everybody, install everybody, a heat pump. What we have said is that the boiler transformation fund, the £450 million fund that we launched in the awesome, if you like to pump, prime the heat pump market, we have seen energy suppliers react really well to that and say that, thanks to the support that is being given by the UK Government, we think that we will be able to drive up to mark, which will therefore bring down costs in the heat pump market. I think that octopus energy, to just give one example, said that thanks to the UK Government announcement in the awesome that they think the cost of a heat pump will become comparable to a gas boiler as early as this year over the life of the installation and the life of the unit. The Government can encourage and drive innovation. We have a really innovative sector in my view, particularly on the energy supply as a competitive sector, but it is something that we need to keep an eye on. Clearly, companies have left that market. We need to make sure that the companies that remain provide a competitive market, which I currently believe that they do, and in the business market as well. I am very grateful. Thank you minister. No further questions, convener. Thanks very much, Liam. Next up is Mark Ruskell. I'll hand over to you, Mark. Thanks very much, convener. Good morning minister. We've had some very sobering evidence on the impact of households who are suffering fuel poverty. We were told that, for many, it's no longer a choice between heating and heating. They can't do either. We were told that, for many, on very low incomes, they are now spending over half of their income on energy alone. You said earlier on in this session that you can't provide complete insulation for those people who are in fuel poverty. You can't protect them. Do you recognise that the package of measures that you announced several months ago now, when we get to the autumn, probably aren't going to be enough to support those people who are going to be in spiralling debt and are going to be faced with even greater levels of fuel poverty? You're going to have to think again as to what those measures are that you can ramp up to protect those people. One example that's been brought to this committee from Scottish Power was the establishment of a deficit fund that wouldn't give people a £200 loan on their electricity bill or give them a £1,000 grant to enable them to get out of fuel poverty and to wipe out their debts. Are you considering initiatives like that? What are you considering may need to be done in the autumn if we're going to continue to see people spiralling into fuel poverty, spiralling into debt? Thank you, Mr Roskell. First thing, I'll just stress that fuel poverty is devolved. I'm assuming you'll be making the same point. I think your party, if I'm not mistaken, is now in government. I'm assuming you'll make that same point to your Scottish Green ministers as well, who will also have responsibility in this space. I can say that the UK Government is doing it. It's worth pointing out that it's not just the £9.1 billion of measures that are announced by the Chancellor on 3 February. We have a lot of existing schemes in place. The Warholms Discount works in a similar way to what Keith Anderson was proposing earlier this week, not to that same extent but in a similar way, where effectively— It looks like we have another slight technical issue with the minister's connection. Minister, your screen froze for a second there as well. If I could ask you to by-track literally 10, 15 seconds. Right. My apology, Mr Lockhart. I've not had this problem before, but the pattern of what Keith Anderson, Scottish Power, was pushing. Keith Anderson is incredibly respected and has been in the market a long time. He is understandably concerned about the market and concerned about consumers, which I think is absolutely the rise approach and is the approach shared by the UK Government. However, we have put in place—the Warholms Discount, we have extended that. We increased it to £150. It now goes to 3 million households. Don't forget that we also have existing schemes in place—cull-weather payments as well—to make sure that the elderly are particularly supported at times of particularly cold weather, as well as increased energy needs. There is a lot of support mechanisms in place. I already mentioned the measure that the UK Government has taken overall to support consumers this year with the rise in the national living wage, the reduction in tax on petrol, diesel and so on. There is all the package of measures, but I am not telling anything that you would not already know that we watch these things incredibly closely across the Government. We also have good conversations with the Scottish Government and other devolved administrations about this. It is a watching brief, but at the moment, the measures that we have in place we think are substantial, and some of those measures that I stated earlier have not yet taken effect. For example, the price stabilisation mechanism—200lb discount of energy bills—has not yet taken effect. We keep a really close eye on that. When it comes to fuel poverty, have you had a word with the ministers from your party as well in the Scottish Government? It would be great if our ministers had full control over energy, including energy markets, but of course we do not minister. That responsibility lies with yourself. I would like to see investment across the UK in getting families out of fuel poverty. It is quite clear that the measures at the moment are not working. That is what we are being told that families are continuing to spiral into debt. You talked earlier on about ideological opposition to nuclear power. Why do you have an ideological opposition to a windfall tax? Across Europe, we are seeing the European Union's plan to reduce reliance on oil and gas, favouring a windfall tax. We are seeing Italy introduce a windfall tax, increasing it to 25 per cent, raising 10 billion euros. We are seeing Spain introduce a windfall tax as well. Surely, as a short-term emergency measure, a windfall tax would help to boost the kind of programmes that you and I know and need across the UK to get families into a position where they are coming out of fuel poverty, and clearly something that would not be resisted by oil and gas majors who are making billions and billions of pounds. Can you tell me why it is that a windfall tax is currently off the table? What would have to change in the state of the energy crisis at the moment for you to reconsider the introduction of a windfall tax? I will be clear that the Chancellor has been clear not to follow the Labour Party's suggestion here of a windfall tax, which I think is also backed by the SNP if I am not mistaken, although I think that their windfall tax might be slightly different. Your windfall tax may also be slightly different in turn, but we have said that oil and gas companies pay corporation taxes twice the rates of other companies. They are paying the big increase in the amount of tax that we are taking from those companies this year already. However, we also need those companies to make the investment, the investment that particularly affects jobs in Scotland—again, I might add, particularly in the north-east of Scotland—100,000 jobs overall, and we need them to invest to make sure that we are able to use our own gas resources in particular at the moment, rather than have to import them. I think that that is incredibly important. It is also worth recognising that a lot of those companies also have big, big investors in renewable energy. Scotland plays an enormous role in delivering renewable energy for the whole country. We do not think that the windfall tax proposed by Labour or, indeed, the SNP—I am almost slightly confused because, in Westminster, MPs representing areas outside of the north-east of Scotland are backing the tax, and the ones representing north-east of Scotland seem to propose it. I am never totally sure whether the SNP in Westminster are for or against a windfall tax. I think that there is a favourable one, but a different windfall tax than a one through Labour already. Overall, we do not think that that is the right approach. We think that the better approach is investment, making sure that those jobs are secure, making sure that our diverse energy mix continues, making sure that the north-east makes the transition, not closing it down, making that transition to guarantee those jobs, that skill base, and making sure that we have the energies that we need today while transforming to the energies of the future for reaching that zero by 2050. For the UK, it continues to play its key international role in this space. When we brought COP26 to Glasgow, that was a proud moment for the UK, for Glasgow. I think that there is an incredible feeling around that conference that Glasgow is a climate compact and a big success. We need to keep delivering of that with our international partners as well. Making sure that all of these things continue to be delivered on is going to be a key part of that. That is why we work very well with our international partners. The UK does not think that as an outlier, we would be an outlier if we were to close down our own oil and gas resources. We would absolutely be an international outlier if we were to do that. Thankfully, that is not what we are doing, but that might be what you might be suggesting that we do. To be absolutely categorised, transition is the answer, not closing down. It is hard to see how the investments that the oil and gas industry may be making, or not making renewables today, are actually going to benefit consumers that are sitting there in fuel poverty spending over half of their income today on energy. Can I ask you, then, final question? You do not believe in a windfall tax. You do not believe that that is the right approach. Presumably, you do not want to take money out of general taxation to invest in supporting those in fuel poverty. Do you believe that that cost should be put back on to energy consumers and that that is where the money should come from to then help support those who are most in fuel poverty? I have already said that we have got a £9.1 billion package this year announced in February by the Chancellor to support energy consumers. We have overall £22 billion this year to support consumers under cost of living pressures. We also have existing measures in place, like the Warhounds discount, with the fuel payments and coal weather payments that support consumers. That is the support that is in place. I am not denying that consumers are facing difficult times at the moment. That is why we are keeping this continually under review. All matters of taxation are always kept under review by the Chancellor, the Exchequer and the Treasury. That is why we announced the measures that we did on 3 February. We would not hesitate to announce further measures, but we are not introducing any emergency budget. We think that we are taking the right action at the right time. As I say, some of those measures have not taken effect yet. They will take effect when consumers are most needed, particularly going into next winter. Thank you very much, Mark. Liam Kerr has a very brief supplemental in this area. Then he will bring in Jackie Dunbar at Liam, please. Very grateful, convener. Minister, just on the line of question we have just heard, Chris O'Shea, CEO of British Gas owner Centrica, said just today that a windfall tax would hit investment and actually push up costs in the longer term. My question to you is, do you think that increased costs to consumers could be a result of the windfall tax that is being proposed? That is a really good question, Mr Kerr. I think that it is very likely to be so, depending on exactly which windfall tax that you take. Anything that prevents or reduces investment in either the energies of today, particularly gas coming out of the North Sea, or renewables today and in the future, is likely to have an impact on prices and emissions, I might add. It is also worth pointing out that the UK continental shelf gas comes with much less emissions than imported liquefied natural gas. Actually, anything that drives down our supply increases our imports. It is also likely to have a negative impact on emissions as well. When it comes to investment, we have been absolutely clear that we need the industry to invest with putting pressure on the industry to invest in the UK. The response, so far, has been good to that. A recent announcement by both the BPM Shell and more investments in the UK is really important that we continue to send that signal. Our signal to industry is that we need you to invest in the UK. We will provide a supportive regime, making sure that you make the transition as well. The North Sea transition deal is, if you like, our Bible. It is a deal that we signed last March with the sector and with obligations on the sector, such as platform, electrification and all those things. The right way to do that is to work with the sector to make the transition and make sure that it invests. In the meantime, the UK Government will make the case for our energy today, while also making our move to renewables increasingly. The UK is a world leader when it comes to renewables. We are a world leader in offshore wind. We do a huge amount of offshore wind, a huge amount of solar, increasingly tidal. We are really setting the pace on how we roll out our renewables. Thanks very much, Liam. Next up, we have Jackie Dunbar. Jackie, over to you, please. Thank you and good morning, Minister. There are multiple different potential strategies and options for minimising the impact of the energy crisis and the cost of living crisis. Some, I think, you have already mentioned, have been put in place, and some have been suggested by witnesses in this inquiry. Should the energy simply not just be subsidised at the point of sale? We provide a lot of support for consumers. The energy price cap itself provides a lot of support for consumers, but this is a competitive market. It is a competitive market with very high prices due to effective world events, the world economy recovery from Covid, the Russian invasion we create is what drives prices. Ultimately, the higher energy prices in the UK are not immune or exempt from high energy prices. Even with our excellent sources of supply, we are not immune from high prices in worldwide wholesale markets. I understand that, but we are trying, regarding the cost of living crisis just now, that we are hearing some pretty hard-hitting stuff. Some innovative ideas, as Mark Ruskell said earlier, Scottish Power has suggested the deficit fund, where they are proposing that £1,000 be taken off the bills of those hardest hits, and they get to repay that over 10 years. Do you think that is a good suggestion? What do you think the practical implications would be in setting up such a fund to help those who are most in need? It is a helpful contribution to the debate, and I always listen carefully to anything that Professor Anderson will tell me about the key role in that. It reflects elements of schemes that we have already got in place, such as the energy bill support scheme, which we are consulting on at the moment. The idea that there is a smoothing of energy prices over a period of time—in this case, £200, with £40, added two bills over the 16 and five years—£200 in this October. We already have schemes that share similarities with what Keith is. The Warholms Disgap has also got elements of this. Those in the most vulnerable households will get £150 extra, which is effectively paid for by households that are in the less vulnerable sectors, typically up to about £10 a year. I think that it is worth bearing in mind that Keith's scheme would also add to bills of other households. It is not effectively subsidised and paid for by other households, so you have to bear in mind that there are winners and losers in many of the schemes, but what Keith is proposing is not dissimilar to the sorts of schemes that we have already got in place to support consumers. I am also a convener of the social justice and social security committee, and we have taken harrowing evidence that shows that people are facing unimaginable choices, and support services are already extremely stretched. That appears to be disproportionate across the UK versus the rest of the world in terms of this global crisis. Evidence suggests that supports that are not going to adequately alleviate the impact of the energy crisis, especially on the most vulnerable households, some of whom have already self-disconnected due to soaring costs and the risk of wholly avoidable deaths looms large this winter. Pre-payment metre households pay more than direct debit households. What justification is there for vulnerable people paying a premium for their energy? We heard yesterday from Ofgem that that was needed to balance the risk to the suppliers, but what protections are in place for those households and what more should be done? Could a social tariff, as proposed by Scottish Power in a previous session, play a role? Thank you for those questions. First of all, the warm homes discount was brought in in 2011 to replace the social tariff. We think that that is the better approach to use the warm homes discount. You raised some very important points about fuel poverty and impact on vulnerable customers, which we are acutely aware of. I say that we have a lot of support in place. I have outlined huge elements of the UK Government support package. Equally, when gas prices are anything up to 12 or 15 times the historic 20-25-year norm when they peak back in early March, you are talking about a completely unprecedented situation. We have provided a lot of support, but I don't think that we are able to completely insulate the UK from these very high wholesale energy prices. Fortunately, they have come down from that peak, but they remain quite volatile. I think that the points of prepayment customers are really important, in that we have to make sure that prepayment customers get a fair deal. That is what we are doing, working closely with Ofgem. The number of disconnections continues to fall, which I think is good. We work strongly with energy suppliers to make sure that they do all that they can to help customers who are struggling to pay their bills. Ofgem warns suppliers that PPMs should only be installed as a last resort for debt collection and banned the forcible installation of vulnerable customers in 2017. Ofgem, rather, in December 2020, we introduced new licensing conditions, including an ability to pay principle and obligational supplies to identify self-disconnecting and self- rationing PPM customers proactively. There are a lot of measures being put in place by the Government and administered by Ofgem to make sure that PPM customers are protected as well. That is very interesting. I am absolutely certain that the committee and my own committee will be following that closely with the data that you say shows that self-disconnections are reducing. That does not chime with the evidence and the reality that we are seeing on the ground. Sticking with data, as is usually the case, there is not enough disaggregated gendered data, but there is strong circumstantial evidence that women are at a higher risk of experiencing circumstances known to make households more vulnerable to fuel poverty. I am thinking about lower pay. We are thinking about those who have caring responsibilities and those who had single-parent families. Therefore, it is important that policy makers understand what role gender plays and that they respond accordingly. Therefore, what gendered analysis the UK Government did prior to agreeing to lifting the price cap and how do you intend to monitor its impact on women going forward? Thank you. That is all incredibly important points. First, the operation of the price cap is a massive offer. The price cap is in there to protect consumers. It was designed as such, particularly to protect those who were facing what is called a loyalty penalty that may get penalised effects, but not moving between suppliers. The fact that the price cap rises if the light roof is backward-looking is better than if there would be no price cap in place, because people would have faced those rises in their energy bills earlier in that six-month period. That is why some of the price cap looks like it is going up a lot and it has done, but it reflects the preceding period of rising prices. I remind you that fuel poverty is, of course, devolved. Scottish measures differ to those in the rest of the UK. I can tell the statistics for England that we do not have specific—because it is done by household, we do not have specific female or male data based on household in terms of fuel poverty data, at least in the rest of the UK. That would be a good question for the Scottish ministers and they would be disaggregated. There are some characteristics of vulnerable customers who are more likely to be women than men. That is certainly true. For example, lone parents with dependent children are 26.5% of fuel poverty compared to 13.2% of the population as a whole. That is not defined, obviously, as being women, but it is much more likely to include women in that, twice the rate of fuel poverty. The base of your question is likely to be correct that women suffer from fuel poverty more than men. I would stress that it would be more complicated if we had to really disaggregate the data overall. We do not publish fuel poverty statistics in England or, I think, even in the rest of the UK based on gender. I am not sure what the Scottish Government does, but we are definitely lone parents and in couples who are more likely to be fuel poverty than single people. That is certainly true. I am not disputing the basis of your question, but fuel poverty data is collected by households rather than by individuals. Some of the indicators within those households will definitely show that lone parents, for example, are more likely to be in fuel poverty than others. Is it a good question to put to the Scottish Government as well as to how they do their data? Thank you very much. I will put to everybody any opportunity that I have, because we do not have enough disaggregated gender data for most things. That brings us to the end of our allocated time. I appreciate, minister, that you have to go at 10 o'clock. Thank you very much for taking part in the session. It is very much appreciated. Good to see you again and enjoy the rest of your day. I now close the public part of this meeting.