09:30 Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)

If that were not unfair enough, think about this: the families across the highlands and islands who suffer these unfair charges, which lead to fuel poverty and even extreme fuel poverty—those who are terrified of the envelope containing the bill when they turn their heating on and try to feed and warm their kids—are sitting in the middle of energy wealth that is much, much greater than their needs, and they get none of it paid back to them. They can see the infrastructure all around them. Renewable energy generates at least six times more than the electricity they use—the figure is higher than that, but let us go on the low side. The rest is exported to the grid, only to be sold back to them at the cost I have described. It is immoral.

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10:02 Ian Blackford (Ross, Skye and Lochaber) (SNP)

If I may, let me put this is in a slightly broader context. We stand on the cusp of an energy production revolution. David Skilling, in his 2022 report, “The Economic Opportunity for Scotland from Renewable Energy & Green Technology”, talks of a potentially fivefold increase in green energy production from the current 12 GW to 80 GW by 2050, transforming the landscape in Scotland, and of course the economic opportunity there for investment and jobs as well. Scotland is therefore playing its part through green energy production, and we must also play our part to deliver on climate change and net zero. An energy-rich Scotland could be the powerhouse of green energy production, with the highlands and islands a key driver in increased onshore and offshore production, and a green energy bonanza driving investment and financial returns for investors, who will benefit from what are, after all, our natural resources.

However, there has to be fairness, and there has to be equity for those who live in the highlands and islands. There is an expression, spoken originally in Gaelic for many generations of Gaels: you do not own the land; you belong to the land. There is sense of responsibility that comes from that to look after the land, to protect it, and to use opportunities wisely. That the highlands and islands is a source of green energy production is something we can take pride in. But what does that mean for those who live there? As has been outlined, the harsh reality is that so many in the highlands and islands are living in fuel poverty. People who live in the region can see the energy production and the transmission lines exporting energy while too many are facing fuel poverty. That is a disgrace.

As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey mentioned, the vast Highland Council area has 0.36% of the UK’s population, yet we produce 5.5% of the UK’s installed capacity for renewable energy. Where is the direct benefit for communities producing energy that the rest of us, in other parts of the United Kingdom, benefit from? Why is it not mandatory in legislation for compensation to be paid by producers to local communities, from whom they need consent to produce that energy? It comes back to that point: you do not own the land; you belong to the land. There ought to be a commitment written into legislation that the communities affected by that should benefit from it. Why is it not mandatory for the transmission companies to recognise the rights of communities to compensation for transmission rights? I want companies to invest in the highlands and islands and for those companies that come and invest to prosper and be a part of our future. I want the highlands and islands to be at the forefront of green energy production. I want investment in green energy to lead to a green industrial renaissance for the highlands, but I want fairness for our communities.

My hon. Friend makes an important and fair point. In my constituency and home island of the Isle of Skye, a number of planning applications are coming forward. Of course, there is always a range of views on these things across all our communities, but if I look back over the past few years and, indeed, at the debate taking place today, on balance, people are generally favourably disposed towards those developments. They understand the importance of getting to net zero. My goodness, the communities that we all represent feel the impact of climate change—we can see it. There has to be that fairness, and the fact is that so many people are living in fuel poverty—the 47% of households that I referred to that live in rural areas. I see it when I am out and about.

In the highlands and islands, we are exposed to the effects of climate change. In general, it is an outdoor lifestyle. Crofting and fishing still provide the backbone to economic activity, and those exposed to such activities are exposed to what climate change is bringing. Anyone who has engaged in crofting can say how difficult it is over the winter months with, from personal experience, crofters increasingly sinking into the mud because it is just so relentlessly wet. That is the effect that climate change is having on us.

It is therefore unsurprising that, in general, those who live in such places as Ross, Skye and Lochaber support green energy initiatives, but there is an increasing concern that rising production produces little direct benefit for communities for that right to produce. That is why we have a broken UK energy market. Let us not forget that the increase in pricing over the last two years is largely because electricity prices are tied to gas prices. However, we have talked about the fact that in the main, people who live in the highlands and islands are off grid. We do not consume gas as part of our energy mix, yet highlanders are paying the price for others’ dependence on gas.

It is simply unfair that Scotland, which produces enough affordable renewable energy for all domestic consumption, must pay higher prices because other parts of the United Kingdom are more reliant on more expensive gas. In energy-rich Scotland, consumers are in fuel poverty because of the broken UK energy market. Those in Scotland are paying a price for being in the United Kingdom—so much for the broad shoulders of the United kingdom; so much for the “Union dividend”. There is no Union dividend; it is a financial penalty, and we in Scotland all pay the price. To put that in a wider context, the value in today’s prices of tax from North sea oil to the UK Exchequer is more than £400 billion. Our legacy from the bounty of North sea oil has been squandered, and we have now been locked out of the benefit of Scotland’s green energy production.

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10:21 Kerry McCarthy (Labour)

Again, we know that renewable energy is going to be way cheaper than fossil fuels, and that is one of the reasons why Labour is committed to the “clean power by 2030” mission—because we know that that will help bring down energy prices. However, I can appreciate how absolutely galling it is to be somewhere where so much energy is generated—I think the right hon. Member for Ross, Skye and Lochaber talked about an economic renaissance for the highlands and islands linked to renewable energy—yet to be last in the queue to actually benefit from that. We absolutely need to tackle that unfairness.

Yes, of course. The point—I think I have to underline it again and again in this debate, and I think that the hon. Lady understands this—is that there is already a windfall tax, and other taxes coming from the highlands and islands through renewable energy, and we are getting nothing back. We are already seeing the effect of money being taken out, and it is not going back into the pockets of the consumers who are being punished in this way.

Scotland’s huge potential for renewable energy generation shows the need for a place-based approach that allows people to feel that they are part of the transition and are directly benefiting. It is particularly galling that Scotland is responsible for so much of the new renewable energy generation, but is not benefiting. In some ways, it should be benefiting more than other parts of the country because it is doing the generation.

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10:32 The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)

I thank the right hon. Member for his intervention. These are the kinds of things that we are working through as we respond to the net zero challenge.

As hon. Members have mentioned, many households in the highlands and islands are off the gas grid, which means they rely more on electricity. I also understand that many highlands and islands residents will use more energy and subsequently pay more for their energy bills due to the inclement weather, colder temperatures and poor insulation, but also due to having older and larger properties, which are harder to heat. To address that, the Government have already introduced several domestic energy efficiency schemes for all households in Great Britain to help lower bills and reach net zero targets. As an example, the Great British insulation scheme is delivering low-cost and free insulation to the least efficient homes in lower council tax bands, including many vulnerable households. The scheme will run until March 2026 with a value of £1 billion.

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