After section 50A

Climate Change (Scotland) Bill: Stage 3 – in the Scottish Parliament at 1:45 pm on 24th June 2009.

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Photo of Alex Fergusson Alex Fergusson None 1:45 pm, 24th June 2009

We continue where we left off. Group 17 is on council tax and non-domestic rates. Amendment 67, in the name of the minister, is grouped with amendments 67A to 67D, 67F, 67E, 125, 125A, 125B, 126, 68, 127 to 129, 69, 130, 70, 131, 132 and 93.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

We accept amendments 67A to 67E, in the name of Lewis Macdonald. If amendments 125A and 125B, in my name, are agreed to, I will also be able to accept amendment 125, in his name. On non-domestic rates, I wish to accept amendment 132, in the name of Alex Johnstone.

I acknowledge the very valuable contribution of Sarah Boyack, whose determination placed a mechanism for incentivising energy efficiency and microgeneration in the text of the bill at stage 2. The Government amendments on council tax should be seen as largely complementary to that. They articulate, in robust and sound drafting, the principles that she has articulated.

We accept the principles of sections 50B and 50D, but a number of gaps and errors make them technically unworkable. I am happy to discuss those in detail during the debate on this group, if members require me to do so. Any remaining differences are only about how best to achieve the aims.

The Government's preferred approach is illustrated by amendment 67, combined with the changes that Mr Macdonald proposes. Overall, there are three issues where we can now reach consensus: a minimum level of council tax rebate; a mandatory element to the schemes; and arrangements for reporting on progress.

There are a number of other advantages to the Government's approach. It gives local authorities the flexibility to design energy efficiency discount schemes in a way that is best suited to the particular issues and challenges that affect their areas. The challenges that face a city council, such as the City of Edinburgh, might well be very different from those that face a council in a more rural area. Local authorities may begin to apply the measures on commencement; they do not have to wait for ministers to make regulations. By providing a broad definition of energy efficiency, new section 80A of the Local Government Finance Act 1992, which amendment 67 inserts, will allow future developments to be included in an energy efficiency discount scheme without the need for further legislation. For those reasons, I will move the amendments in my name and support those in the name of Mr Macdonald.

This is a difficult area of law, and action taken in one area can often have an unintentional, adverse impact elsewhere. That is the case with the provisions that Sarah Boyack's amendments inserted in the bill at stage 2, and with her stage 3 amendments, a number of which also relate to non-domestic rates. I will give some examples. Section 50B reduces the amount of council tax that a person is liable to pay in the following financial year. A similar weakness arises in relation to non-domestic rates. I fear that, because of the time lag, home owners might be put off making home energy improvements if they are considering moving home. Our proposal would reduce council tax liability in the same year in which an improvement is made. That makes the incentive potentially more attractive, as the rebate is enjoyed immediately. More important, it should help to encourage the quicker implementation of energy efficiency measures, which can only be a good thing.

The Scottish Government envisages that the rebate will be funded through successful partnerships between local authorities and energy suppliers, as is the case in England and Wales. However, without the flexibility that amendment 67 offers, combined with Lewis Macdonald's amendments, unmanaged demand from people in well-insulated properties might conflict with other locally led schemes to promote the uptake of energy efficiency measures. That could have a knock-on effect on council tax revenue. In the current economic situation, we do not think that it would be right to add unduly to such pressures on local authorities.

Furthermore, many businesses would not see any benefit from amendment 131, on non-domestic rates—on which we have identified some technical issues—as they are already exempt from paying rates through the various rates relief schemes. Amendment 132, on the other hand, would give the Scottish ministers the power to make regulations in respect of reductions in non-domestic rates for properties that fall into different categories and bands on the basis of their energy efficiency and greenhouse gas emissions.

Let me summarise. I recommend that members agree to amendments 67, 67F and 68 to 70, which will remove sections 50B to 50D. I also commend to members amendments 67A to 67E and 125, in the name of Mr Macdonald, along with the Government's amendments 125A and 125B. Finally, I endorse amendment 132, in the name of Mr Johnstone, and I ask members to do likewise. In consequence, I must ask members to reject amendments 126 to 131, if they are moved, as they are unnecessary in the light of the other amendments in the group.

I move amendment 67.

Photo of Lewis Macdonald Lewis Macdonald Labour

In the hierarchy of actions that we can take to reduce carbon emissions, action on energy efficiency must always come first. Council tax discounts offer a significant incentive for householders to improve the energy efficiency of their homes.

As the minister has graciously acknowledged, we are discussing the amendments in group 17 as a direct result of Sarah Boyack's vision and persistence in pursuing the matter, and her success in building a broad coalition of support behind her member's bill proposals on energy efficiency and microgeneration, which is an important part of the same approach.

As the minister has acknowledged, the Transport, Infrastructure and Climate Change Committee approved that approach at stage 2. I welcome the fact that ministers have moved to support action on energy efficiency in the terms that we have heard. My amendments are designed to ensure that the scheme that the minister introduces achieves the desired results, and I welcome Mr Stevenson's support for them. Without such amendments, the minister's proposals would have allowed discount schemes that supported energy efficiency improvements, but they would not have guaranteed access to the benefits of such schemes across Scotland. If Parliament agrees to my amendments, that access will be guaranteed. Any householder who wishes to make energy efficiency improvements will enjoy access to a council tax discount. There will be no risk of a householder's council not having such a scheme, or of its not applying it to the local area or to the valuation band of the house in question.

The message that such discounts are available right across Scotland is a clear and positive one. Of course, a national approach implies a national commitment, and I am glad that ministers have endorsed such an approach throughout Scotland. It is true to say that the bill must provide a framework for the energy companies so that they can invest in improving the energy efficiency of Scottish housing through the carbon emissions reduction target scheme, and we would expect central and local government fully to endorse and support that approach.

Amendment 125 provides for a review of the effectiveness of discount schemes, and it does so on an all-Scotland basis, so that any changes that are made will be consistent in all 32 local authority areas. I am happy to accept the minister's amendments to amendment 125, as well as Alex Johnstone's amendment 132. I urge members to support those amendments.

I move amendment 67A.

Photo of Sarah Boyack Sarah Boyack Labour

In my view, the amendments in this group are probably the most important practical policy provisions that we will discuss today, from the point of view of their power to transform people's attitudes to energy and their capacity to start making a difference on the huge amount of energy and heat that is wasted in this country. Somebody said earlier that 80 per cent of the buildings that will exist in 2050 have already been built. Our challenge is to encourage householders to make their houses more energy efficient.

Energy efficiency measures are incredibly cost effective and are the cheapest and best way to start to tackle climate change. However, people do not routinely put such measures into their houses, because they think that it is a hassle, they do not know how to get advice on them, they do not know a supplier and they do not know where to start. Even simple measures such as loft insulation or cavity wall insulation need to be put in place. For example, we could install cavity wall insulation in about 700,000 houses in Scotland, but we are not doing so, because we cannot put the pressure on and do not have the mechanisms to let people get on with it.

Last year, the Energy Saving Trust published research in England and Wales and then in Scotland that demonstrated that a one-off council tax reduction is an incredibly effective way in which to draw people's attention and persuade them to act. Thousands of businesses have properties that could be changed. A reduction in council tax and business rates would mean that people could save on their bills—that is crucial, given that fuel prices for domestic properties have gone up by about 50 per cent over the past five years—and play their part in saving the planet. The message is really simple.

As colleagues have said, I have worked for five years now to bring these measures to the chamber. I thank everybody; I have previously thanked colleagues in the Parliament and the members of my steering group. I am delighted with where we have got to today. I would have loved it if the minister had sat down and talked to me about the measures months ago, but the Government had a they-shall-not-pass policy on council tax. However, I give the minister credit, because he has been incredibly helpful in the past week or so in ensuring that we have something in the bill that will work, which is my top priority. It is not the scheme that I wanted, but it is a good place to start. I listened to the minister's officials last week and I do not want to impose a scheme that they do not like and which they could not make work.

The proposed measures will bring in CERT money. A sum of £50 is a good start and is enough to catch the attention. The review mechanism will be included, if we vote for all Lewis Macdonald's amendments in the group. Crucially, I want to ensure that the scheme cannot be a cherry-picking one that would mean that people could get money off their council tax only if they lived in particular local authority areas or certain streets. The scheme must be implemented across the country.

The minister has given a commitment that there will be guidance from the Scottish Government. That will be crucial in helping local authorities and in ensuring that they do not have too many burdens. In addition, with regard to the money for energy efficiency in the budget that we passed this year, I hope that the proposed provisions will allow us to draw in additional money from the private sector through CERT, which would make the £15 million that we supported earlier this year go much further. There will be another discussion about the issue next year, but I hope that the scheme gets up and running, that we begin to see a difference and that we can tackle not just climate change but fuel poverty, which afflicts almost 25 per cent of households in Scotland—that is a national disgrace and a national shame. The proposed measures will not fix that issue tonight or tomorrow, but they will put in place a mechanism that will let councils work with the power companies and individuals to make a difference.

I hope, too, that the Parliament will support the measures in Alex Johnstone's amendment 132, on non-domestic rates. The Tories have been supportive of my member's bill proposal throughout, for which I give them credit. It is probably appropriate that amendment 132 has fewer faults than my amendments in the group—that is the benefit of lodging a smaller amendment. I know that the business community is seized of the need to undertake energy efficiency measures. There is much support for the measures from big companies such as Tesco and groups such as the Scottish Property Federation.

I hope that we can all move forward today on the measures. The test will be next year, when we assess how far we have gone. I will not move my amendments in this group—amendments 126 to 131—but I will support the amendments in the group in the names of Lewis Macdonald, Alex Johnstone and Stewart Stevenson, which take us a lot further forward.

Photo of Alex Johnstone Alex Johnstone Conservative

I said earlier that I do not like the whole business of setting targets, because I have gone through that painful experience previously. It is far more practical to set out measures that will assist individuals, whether they are householders or business owners, to achieve the targets. That is why, in my view, chapter 3 contains some of the most significant provisions in the bill.

I pay tribute to Sarah Boyack for the work that she has done on promoting the energy efficiency aspects of the bill. I was not sure how long that has taken, but I heard her say in her speech that she has been working on those provisions for five years. At an early stage in that process, I took the opportunity to support in principle what she was trying to achieve.

The issue became the subject of intense debate at stage 2, when various members presented a number of slightly different proposals to introduce into the bill council tax discounts for people who take energy efficiency measures. At that stage, we obtained the Government's agreement in principle to move forward on the issue and, pending the publication of Government amendments at stage 3, I decided to withdraw or not move my own amendments. I am therefore pleased to support not only amendment 67 but amendments 67A to 67F, in the names of Lewis Macdonald and the minister.

However, one issue that was not finalised at stage 2 was the inclusion of the non-domestic rateable sector in the broad provision. As a result, I have lodged amendment 132, which mirrors an amendment that I lodged but did not move at stage 2.

Once again, I commend Sarah Boyack for her work on this matter. However, I seek the Parliament's support for amendment 132, which I have attempted to keep as simple as possible and which seeks to allow the Government to introduce a scheme, the detail of which will be fleshed out under the affirmative procedure. I hope that we will agree to that measure later.

Photo of Liam McArthur Liam McArthur Liberal Democrat 2:00 pm, 24th June 2009

In recognising Sarah Boyack's contribution, the minister has set the tone for comments on this group of amendments. I certainly associate myself with his comments and with those made by Lewis Macdonald and Alex Johnstone. Although the manifestos of the various parties set out proposals in this area, the cross-party approach that was taken on the issue was very much a priority for Sarah Boyack, with expertise and support brought in from outwith the Parliament.

Earlier, I mentioned the pressures and difficulties created by the timetable for scrutiny of the bill. Given how long Sarah Boyack has been working on these proposals, it is perhaps unfortunate that even at stage 3 we are still trying to piece together a workable solution. However, as Lewis Macdonald and Alex Johnstone have pointed out, we have found a workable solution that covers both domestic and non-domestic incentive schemes.

In seeking to amend the Government's amendment, amendments 67A to 67E, in the name of Lewis Macdonald, seek to enshrine in the bill a national dimension to the proposed programme, and I welcome the minister's support for the important approach that they set out.

Amendment 132, in the name of Alex Johnstone, certainly enjoys the benefits of brevity and simplicity. With the reporting requirements that amendment 125 seeks to introduce, the provisions will ensure that we are able to respond if, where and when necessary.

This part of the bill will have a very direct impact on the situation and as parliamentarians we will be able to support it with some confidence in our constituencies.

Photo of Alex Fergusson Alex Fergusson None

I call the minister to wind up on amendment 67. You can have three minutes, minister.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

Taking members' advice about brevity and simplicity and given the unanimity and shared sense of purpose in the chamber, which I have to say bodes well for the whole climate change agenda, I may not need all that time, Presiding Officer.

However, I wish to make a couple of remarks. First, I again acknowledge Sarah Boyack's efforts on this issue and thank her for reciprocating in her comments about the efforts that we have made in recent weeks. It is also worth revisiting her very important point that, although the proposal is part of the climate change agenda, it contributes to other policy areas, in particular our efforts to tackle fuel poverty. We have always recognised that improving the energy efficiency of people's houses and reducing people's energy bills plays to another agenda, and that is another important reason for moving in a direction that now appears to have secured unanimity in the chamber.

Photo of Lewis Macdonald Lewis Macdonald Labour

Likewise, I will be brief and simply acknowledge the chamber's strong—indeed, unanimous—view that we have reached this point as a result of Sarah Boyack's commitment and latterly the willingness of all parties to find a common route to ensure that progress was made in this area.

The critical question now is how the measure will be delivered and how we ensure that, in putting the schemes in place, local authorities have the full support not only of the private sector partners that deliver energy and have committed to improve energy efficiency but of every level of Government. On that basis, the Parliament has taken a significant step forward.

Amendment 67A agreed to.

Amendments 67B, 67C and 67D moved—[Lewis Macdonald]—and agreed to.

Amendment 67F moved—[Stewart Stevenson]—and agreed to.

Amendment 67E moved—[Lewis Macdonald]—and agreed to.

Amendment 67, as amended, agreed to.

Amendment 125 moved—[Lewis Macdonald].

Amendments 125A and 125B moved—[Stewart Stevenson]—and agreed to.

Amendment 125, as amended, agreed to.