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Ministers to help probe into north energy bills

A safe haven is being established for Black Isle residents.
A safe haven is being established for Black Isle residents.

The UK Government has pledged to “work closely” with regulators who are investigating an overhaul of the energy market so consumers in northern Scotland pay less for power.

Ministers yesterday published their official response to an energy committee report which called for a major inquiry into the current regional charging system.

They confirmed that the regulator Ofgem was investigating changes to the policy – which ensures families in the north and north-east pay the highest electricity costs in the UK – and would report in the summer.

The probe was launched after the Press and Journal highlighted the “post-code lottery” system and campaigned for a fair deal on prices.

Chancellor George Osborne responded to the concerns at this month’s Budget by announcing that urgent action would be taken to peg prices in northern Scotland to the next highest rate in Britain, saving families about £30 a year.

However, campaigners have urged the UK Government to go further and completely abolish the regional pricing system, and replace it with a flat, national rate.

MPs on the energy and climate change select committee last month said a major study was needed before a decision could be taken on such radical reform.

In its official response to the group yesterday, UK ministers said: “The government agrees with the committee that a move to a national tariff for gas and electricity networks would require major changes to the charging system, but also may have knock-on effects in respect of institutional design and wider processes and systems.

“Any decision on whether to pursue this further could only be sensibly considered on the basis of a robust and evidence-based analysis.

“Ofgem is working to inform the issue in the summer, and the government will work closely with them on this.”

Ministers said there were several “key considerations” to be explored, including the fact that it would mean lower charges in areas such as the north of Scotland, but higher tariffs in others.

Kevin Stewart, SNP MSP for Aberdeen Central, said: “It look like the UK Government are keen to kick this issue into the long grass.

“The UK Government say that they cannot change the scheme as poorer customers elsewhere may face higher bills if a national tariff is introduced, but they seem to give not one jot about poorer folk in our area who have had to face high prices for years. This is a scandal.”