Fuel Poverty (Engagement with Energy Sector)

– in the Scottish Parliament on 1st December 2022.

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Photo of James Dornan James Dornan Scottish National Party

2. To ask the Scottish Government whether it will provide an update on any recent engagement it has had with the energy sector regarding support for those at risk of fuel poverty. (S6O-01637)

Photo of Michael Matheson Michael Matheson Scottish National Party

The First Minister has chaired two energy summits since August. All major energy suppliers attended the summits, along with advice providers and third sector organisations.

The summits discussed the impact of the measures that have been introduced by the United Kingdom Government in response to the energy crisis and agreed that the UK Government should be targeting more support towards people who are living in vulnerable circumstances. Other outcomes include the Scottish Government commitment to work with public and private sector partners to explore how people living in fuel poverty can be further protected within our devolved powers.

Photo of James Dornan James Dornan Scottish National Party

At the most recent summit, the Scottish Government agreed to work with Energy UK and other organisations to increase smart meter coverage in Scotland. Although aspects of smart meter usage are helpful, the cabinet secretary will be aware of the shocking and, frankly, immoral actions of energy companies that are using smart meters as a back door to switch consumers to prepay mode, often on a more expensive tariff and without informing people or having to apply for a warrant. That has already happened to more than 150,000 households, with the Office of Gas and Electricity Markets estimating that a further 180,000 households will be affected this winter. Can the cabinet secretary say how many households in Scotland that has happened to and whether it is legal, given that, previously, companies would have had to apply to the Scottish courts for a warrant before taking such action?

Photo of Michael Matheson Michael Matheson Scottish National Party

Although I cannot give an exact figure, we are aware of instances in which energy suppliers have switched their customers’ accounts to prepayment mode without informing them or obtaining a warrant beforehand. That can have serious implications for customers, particularly those living in vulnerable circumstances. We condemn that kind of practice, as it is likely to exacerbate the challenges that some households in fuel poverty are already contending with.

I have asked my officials to engage with Ofgem directly on the matter and to look for action to be taken. In the meantime, I reassure members that, if they have a constituent who is affected, they can seek advice through our advice services and, primarily, through Advice Direct Scotland.

Photo of Mercedes Villalba Mercedes Villalba Labour

The UK’s major energy distributors made £15.8 billion in profits last year, despite rising energy bills putting more consumers at risk of fuel poverty. Unite the union is calling on Ofgem to reopen its price review and set a clear cap on distributors’ profits. Will the cabinet secretary join Unite in urging Ofgem to act now to end that rampant profiteering?

Photo of Michael Matheson Michael Matheson Scottish National Party

I certainly support the need to ensure that we take a fair tax return from those who are making excessive profits in our energy sector—energy companies, in particular. I gently point out to Mercedes Villalba that we are in a situation with energy companies making record profits, yet Scotland—one of the most energy-rich nations in Europe—has one of the highest levels of fuel poverty in the whole of Europe. Rather than writing to UK Government ministers or pleading with Ofgem to act on these matters, I would prefer to have the powers in this Parliament to tackle them, so that we can tax those companies properly and end fuel poverty once and for all in energy-rich Scotland.

Photo of Beatrice Wishart Beatrice Wishart Liberal Democrat

Some of my constituents are experiencing significant delays in having faulty meters replaced or repaired, because energy companies have contracted out that work to third parties. Already impacted by high levels of fuel poverty, they face increased anxiety about their bills. Our island areas are also experiencing market failure and new electricity contracts for both business and domestic consumers. Has the Scottish Government had any discussions with the energy sector about these serious problems?

Photo of Michael Matheson Michael Matheson Scottish National Party

We raise such issues on a regular basis with Ofgem and the UK Government, which, ultimately, is responsible for those matters, including issues relating to energy meters and the failures in and regulation of the market. Those failures are evident and are adding to fuel poverty and the high increases in fuel bills that people are facing.

If Beatrice Wishart has some specific examples that she wants us to highlight to Ofgem, I am more than happy to receive such information and ensure that it is forwarded on to it and that we ask it to take urgent action to address the matters.