The Fuel Poverty Bill enshrines in law the Scottish government’s commitment to tackle the root causes of fuel poverty and transform homes to be warmer and more energy-efficient.

The bill defines a household to be in fuel poverty if more than 10 per cent of its net income (after housing costs) is required to heat the home and pay for other fuel costs – with not enough money left for a decent standard of living. If more than 20 per cent of net income is needed, the household is defined as being in extreme fuel poverty.

The new law sets a target of no more than five per cent of Scottish households in fuel poverty by 2040, and no more than one per cent of households being in extreme fuel poverty. There are also targets to reduce household fuel poverty levels as progress is made towards meeting the 2040 targets.

Housing minister Kevin Stewart said: “It is unacceptable that people are forced to choose between heating or cooking their dinner because they worry about fuel bills.

“This is the most ambitious and comprehensive fuel poverty legislation in the UK, setting us on a course to provide greater help for people who need it most by defining fuel poverty more closely with income poverty.

“This important bill will continue Scotland’s world-leading position as one of only a handful of countries to define fuel poverty, let alone set targets to eradicate it.

“The innovative use of the Minimum Income Standard means that we have a definition which also takes into account household incomes. And with an uplift for remote rural and island areas recognising their higher cost of living, we are taking into account the different needs of all of Scotland.

“The bill’s targets are challenging, yet realistic, and achieving them will make a real difference and allows us to target our resources to best effect.

“By 2021 the Scottish government will have allocated over £1 billion to tackle fuel poverty and improve energy efficiency, through our programmes and schemes – making people’s homes warmer and cheaper to heat.”

Dr Jamie Stewart, Citizens Advice Scotland’s energy spokesperson, said: “We are pleased to see that today the Scottish Parliament has passed this important Bill, and we now want to see urgent action in helping people struggling to pay their heating bills. Our research revealed that 1 in 10 working people have had to miss an energy bill in the past year because they have run out of money, so this law was desperately needed.

“The Citizens Advice network in Scotland helps hundreds of thousands of people each year and many thousands of our clients are concerned about energy costs.

“While we would have welcomed commitments to make the targets more ambitious, the important thing is that targets have been reset, and what matters now is that action is taken quickly to really help people on the ground who are struggling. It is the policies set out in the coming Fuel Poverty Strategy that will really dictate how much progress is made on reducing fuel poverty.

“The Fuel Poverty Strategy will be tasked with delivering this action and making sure that the commitments made in the Bill are met. The Strategy must be given enough resource so that it can properly tackle the drivers of fuel poverty and end the unacceptable situation of people living in cold homes in Scotland.”