Fear of Raised Prices in Wake of Energy Pledge
By Anne Lewis-Schneider
The pledge made by Labour Party Ed Miliband to freeze the price of energy could be the forerunner of a cut in investment, employment, increased company insolvencies, blackouts and energy price increases by energy suppliers if it comes into being. According to Fergus Ewing the Labour Party pledge is not feasible. A similar attempt was made in the USA in California in 2000 which saw a hike in the price of energy by 800% and even lead to blackouts.
Smacking of electioneering, Ed Miliband pledged to freeze the prices of gas and electricity for a period of 20 months if Labour is voted in on the next election set to take place in 2015. This freeze will come into effect in 2015 on successful election and run until January 2017. He went on to add that the saving to the general household would be around £120 and for businesses an average saving of £1,800 over this period.
Iain Gray, Labour finance spokesperson has said that the proposed freeze along with a new regulatory board with the mandate to control pricing of energy could be of benefit to consumers who give a nay vote to independence and a yay vote for Labour in the upcoming election. Fergus Ewing has suggested an independent regulator for Scotland to oversee Telecommunications, Water, Rail and Energy. Iain Gray maintains that Scotland will benefit if they remain under the UK banner.
Fergus Ewing commented that the existing track record of Regulators for banking, and the Railway are not anything to be proud of and experts on consumerism have predicted huge price increases by energy companies and a decline in investment in low carbon energy technology before the price freeze would become effective.
There are concerns in the energy industry that smaller companies would face insolvency and bigger companies may lose jobs and have to reconsider their energy usage. Scotland needs to increase its input into renewable sustainable low carbon energy and a price freeze would be detrimental to the growth of this energy supply. Fergus Ewing stated that an independent Scottish regulator could be used to replace the individual UK regulators currently operational, and an independent energy commission manned by experts in the fields of industry, with academics and consumer experts has been brought into being to prove how effectively energy and gas could be regulated by an independent Scotland.
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