SCOTLAND’S energy minister Fergus Ewing has ruled out the introduction of Labour’s energy price freeze in an independent Scotland, claiming it would cause blackouts, price rises and job losses.
Mr Ewing launched a scathing attack on Ed Miliband’s policy, describing it as “completely unworkable” when he was questioned on it in the Scottish Parliament yesterday.
A clear policy divide between the SNP government and Labour opened up when Labour claimed that the Nationalists had taken the side of the big energy companies rather than hard-pressed consumers, over the Labour Party leader’s pledge to freeze gas and electricity prices for homes and business for 20 months after the 2015 general election.
Mr Ewing’s views came to light when the Labour finance spokesman Iain Gray asked the energy minister if he would match Labour’s promise to freeze prices and establish a new UK regulator to control the cost of electricity.
In a withering response, Mr Ewing said a similar approach had been attempted in California and had led to blackouts and huge price rises from electricity companies anxious to pre-empt the freeze.
“The record of regulators in the UK when one considers regulation of banking, the railway or payday loans isn’t one to boast about,” Mr Ewing said.
“Consumer experts have said that before this freeze comes in, the companies will whack the prices sky-high and companies may put off decisions to invest in new cleaner generation capacity.
“The industry, SSE and ScottishPower have said smaller companies would face insolvency and bigger companies would have to consider energy use and jobs.
“An arbitrary price freeze has been tried before in California in 2000, which led to blackouts and an increase in the wholesale price of 800 per cent.”
At Minister’s Questions at Holyrood, Mr Ewing stepped up his attack arguing that Labour’s approach would discourage energy companies from investing in Scotland’s green energy industry.
“Never can I recall a measure introduced by a leader of a major political party in the UK which has received such widespread, utter and total condemnation as being completely unworkable,” he said.
“And worst of all for Scotland, such an arbitrary measure threatens to impair the essential investment in renewable energy schemes which are so important for this country.”
Mr Miliband’s plan has been hailed by his supporters and consumer groups as an effective way of protecting consumers against the hefty electricity bills charged by the “big six” energy companies.
According to the Labour leader, the move would save the typical household £120 a year and an average business £1,800 between May 2015 and January 2017.
Critics of the proposal, which was unveiled as a key Labour policy at the party’s recent conference in Brighton, claim it will derail the energy market.
Centrica and SSE saw their stock market values fall after the announcement was made last week, and energy trade representatives warned that the policy could result in energy shortages and harm investment in energy infrastructure.
The forthright nature of Mr Ewing’s views yesterday came as a surprise, after the SNP’s youth employment minister Angela Constance said earlier this week that Labour’s policy was “very well intended”, but urged Mr Miliband to publish the research behind the move.
Later, after Mr Ewing made his remarks, a spokesman for the Scottish Government said that there had not been a “substantive discussion” on the issue in Cabinet.
Mr Gray responded by saying that Mr Ewing’s approach would see energy prices spiral in an independent Scotland.
Labour’s finance spokesman said: “I welcome the fact that the Scottish Government has finally ended its silence on this key issue and picked a side. Sadly, the SNP has chosen the side of the big energy firms over hard-pressed families being hit with growing energy bills.
“Ed Miliband’s plan to freeze energy bills and reform the energy market was welcomed by families who will be dismayed that the SNP government has failed to match this pledge.
“Not only are the SNP refusing to support a price freeze, they have set their face against a regulator with the power to control prices in the long run.
“Fergus Ewing spoke today for the energy companies and against the Scottish consumer. Fergus Ewing’s answer also means that the SNP plan to break up the single integrated British energy market.
“That means the costs of supporting renewable electricity and new grid infrastructure may well end up on Scottish bills instead of being shared across the whole of Britain. This is a double whammy in their energy bills for Scottish families.
“The message is clear – a Yes vote in the referendum is a vote for higher energy prices, and for an SNP on the side of big business not the consumer.”
The Liberal Democrat energy spokesman Liam McArthur said: “The Nationalists are all over the place. In two days, two ministers have taken two diametrically opposed positions. This demonstrates that the Nationalists will say anything to anyone to achieve independence.
“I tend to agree with Mr Ewing. It’s a pity his own ministerial colleagues don’t seem to.”