ENERGY bills would be cut by 5 per cent in an independent Scotland, Deputy First Minister Nicola Sturgeon has pledged, telling the SNP conference in Perth that households would save about £70 a year as a result of the plan.
Amid mounting anger over rising energy bills, Ms Sturgeon said the Scottish Government would use the powers of independence to tackle fuel poverty by removing several green charges.
The SNP hopes to trump Ed Miliband’s pledge to freeze energy bills if Labour wins the 2015 general election, and Ms Sturgeon said her party’s plan would have more impact as it was “not a short-term measure but a real and lasting cut”.
Her announcement comes hard on the heels of a series of price hikes by some of the UK’s leading energy companies.
This week, British Gas became the second of the Big Six to raise its bills, just a week after Perth-based SSE.
The SNP says the 5 per cent cut could be achieved if an independent Scottish government had control over energy, a matter reserved to Westminster. Under the plan, Scottish ministers would cancel two levies Westminster requires energy companies to raise from consumers – the energy company obligation (ECO) and the warm homes discount.
Under the ECO, firms are legally required to install energy-efficiency measures to reduce the fuel bills of vulnerable people, while the warm homes discount provides some customers with a saving on their bills.
Ms Sturgeon pledged that, under independence, an SNP government would provide the overall levels of support to the two schemes from central funds.
Speaking to delegates at Perth Concert Hall, she said: “In an independent Scotland, we will be able to tackle fuel poverty much more directly and ensure that energy companies always behave in a socially responsible way to protect vulnerable customers.
“An SNP government in an independent Scotland will remove the cost of energy-saving measures and the warm home discount from energy bills. We will provide that funding from central government resources.
“This will mean direct government funding for fuel poverty schemes of at least £200 million per year. This won’t just allow us to deliver our energy-efficiency schemes more effectively, it will also save hard-pressed consumers money.”
She added: “We estimate that it will cut energy bills by around 5 per cent, or £70 a year.”
Although Westminster’s control of energy makes it impossible for the Scottish Government to implement any scheme before independence, the move may put pressure on the coalition government to consider a similar move across the UK.
Energy companies appeared to approve of the logic behind Ms Sturgeon’s initiative.
An SSE spokesman said: “SSE believes all UK political parties should take the environmental and social programmes that are currently levied on customers’ bills into general taxation.
“This would reduce bills by up to £110 immediately and by up to £200 by 2020. It would also shift the burden away from people who cannot afford to pay for these schemes on to people who can.”
The Better Together campaign, however, was sceptical, saying Scottish consumers would have to bear a heavy burden in subsidies for the country’s large renewables sector should the country become independent.
A spokesman said: “This is yet another grand promise from the SNP that simply doesn’t stack up.
“Separation would mean the loss of our EU rebate and the support for renewables investment in Scotland which is shared by energy bill payers across Britain. The additional cost to the taxpayer and hard-pressed energy consumers would dwarf any supposed cut from the SNP.
“SNP ministers say publicly that they will cut our bills but know privately that, in reality, household bills would rise if we separated from the UK.”
He added: “They will say and do anything to get people to vote for independence.”
Tom Greatrex, Scottish Labour’s energy spokesperson, said: “This looks like a panicked response to Labour’s ambitious plans to reset the energy market, and another referendum promise they can’t deliver.
“Rather than taking on the big energy companies who are profiteering by ripping off Scottish families, Nicola Sturgeon has come up with a sleight of hand. The SNP leadership know that bills would rocket by hundreds of pounds if Scotland separated off and we were left to foot the cost of funding renewables investment, which is currently shared across Britain.”
Alleviating poverty was a recurring theme of Ms Sturgeon’s speech, which included an announcement the Scottish Government would fund the Poverty Alliance to deliver a Living Wage Accreditation Scheme.
It would promote the living wage and increase the number of private companies that pay it.
Looking at the big picture, Ms Sturgeon argued the only way for Scotland to create a more equal society was through independence, and she claimed a No vote would threaten Scotland’s ability to develop its own policies.
“We have been able to protect our NHS from privatisation and we’ve protected students from having to pay for their university education,” Ms Sturgeon told conference delegates.
“But our ability to protect is already causing frustration at Westminster and that should sound alarm bells about what might happen in the event of a No vote. Just a couple of weeks ago, we had Labour’s Westminster shadow health secretary calling for consistent health policies across England, Scotland and Wales. In other words, not more devolution, but less devolution.”