THE Scottish Government has ruled out the possibility of freezing energy bills if voters back independence next year.

 

Energy minister Fergus Ewing warned Labour's proposed 20-month price freeze, which the party has promised to enforce if it wins power in 2015, would lead to blackouts, put companies out of business and cut investment in renewables.

In a strongly worded attack on Labour leader Ed Miliband's pledge, he told the Scottish Parliament: "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%.

"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.

"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."

He warned energy firms would "whack prices sky-high" before a freeze. Smaller firms, he said, would go out of business while bigger companies would slash jobs.

The minister also refused to back Labour's plan to strengthen the energy regulator, giving it the power to control prices in future.

He suggested an independent Scotland should create a super-regulator with responsibilty for other utilities such as water. His comments came as he answered questions from Labour's finance spokesman Iain Gray.

Before Mr Ewing's comments, the Scottish Government had not taken a position on Labour's pledge, merely calling on the party to explain how the policy would work in practice.

Mr Gray said later: "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.

"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."

He claimed the position adopted by the Scottish Government undermined its call to maintain a UK-wide energy market if Scotland became independent.

Mr Gray added: "Fergus Ewing's answer also means 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 Britain."

Mr Miliband used his speech at the Labour conference last week to pledge a 20-month price freeze as a first step towards reforming the energy market.

It followed several years of above-inflation price rises that have been blamed for pushing families into fuel poverty and contributing to what Mr Miliband called a "cost of living crisis".

He claimed the move would save the typical household £120 and an average business £1800 between May 2015 and January 2017.

Mr Ewing's comments echoed criticism from the Conservatives and big energy firms, which claimed a price freeze would cut investment and threaten blackouts.

The Scottish Government set up an expert panel earlier this year to draw up plans for electricity and gas regulation in an independent Scotland.

The body - made up of energy industry figures, academics and consumer champions - has been asked to come up with proposals which would allow a UK-wide market to be maintained. It is due to report back by the end of this year though the recommendations are unlikely to come in time to be included in the Scottish Government's independence white paper.

Mr Miliband is also planning a radical shake-up of energy regulation across the UK. He said Labour would legislate to abolish energy watchdog Ofgem and replace it with a new regulatory regime that ensured customers received a "fair deal".