Ed Davey: Scotland faces higher energy bills if it leaves the UK

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Ed Davey has claimed Scotland will face higher energy bills and taxes if it leaves the UK.

Talking at the Scottish Renewables Annual Conference in Edinburgh, the energy secretary claimed energy powering Scotland's three million homes is currently subsidised by the other 33 million plus homes in the UK.

A potential alternative to higher bills would be cuts in public services such as health, benefits or education he suggested.

If Scotland were to leave the UK, it would then have to devote a much larger portion of its national budget to renewable energy generation according to Davey. And, although he believes Scotland is more than capable of going it alone, he warns the UK is "more than the sum of its parts".

He said: "When it comes to energy, the positive case for Scotland in the United Kingdom is simple. The size of the United Kingdom protects Scottish consumers from the full costs of Scottish power generation.

"In the United Kingdom, Scotland's households pay less than they would in Scotland alone. Why? Because, the UK's integrated energy market is ten times larger than that of Scotland's alone.

"Scotland has a tenth of the households in the UK as a whole. But over a quarter of all UK support for renewable generation goes to Scotland.

"These costs and subsidies are spread out over all 33 million households, not just Scotland's three million.

"If Scotland were to choose to go it alone, maintaining this level of support would take up a greater proportion of national finances. Meaning either higher taxes, higher energy bills or cuts in other areas: welfare, housing, education, health, defence may be losing out."

A spokeswoman for the Scottish Government hit back at Davey's claims however, suggesting he was wrong to bring tax into the equation as if Scotland did leave the UK, there would be no such issues over taxation.

She said: "Scottish energy bills will go down in an independent Scotland because of the removal of the Energy Companies Obligation and the Warm Home Discount from bills.

"The current breakdown of payments from suppliers to generators is related to the huge amount of renewable power which Scotland produces - not to our population size.

"Suppliers in England and Wales will continue to need and to pay for that power for their customers regardless of the outcome of the independence referendum, and that is why the current single market arrangement remains in our shared interest."

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