Electricity Market (Scotland)

Part of the debate – in Westminster Hall at 2:41 pm on 8th September 2004.

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Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change) 2:41 pm, 8th September 2004

It is idle to speculate on that. He was, rightly, a Liberal and it is difficult for many liberals to exist within today's SNP, but I take the hon. Gentleman's intervention in the spirit in which it was offered.

Much comment has been made about how Ofgem regulates the markets with whose regulation it is charged. The hon. Gentleman has already speculated that, had we had Ofgem at the time, we would not have seen the development of hydro energy in the post-war period, and would not have had the hydro benefits. It is true that the parts of those two crucial planks of Government policy not accounted for by Ofgem would be caught by state aid rules. The highly artificial way in which Ofgem seeks to regulate the market, driven in some ways by free market zeal, is exceptionally unhelpful.

All hon. Members who have spoken today have highlighted the tension at the heart of Government policy between the desire to promote markets as a mechanism for delivery and that for a particular social good, the promotion of renewable energies. Ofgem is a major potential barrier between the two.

It has always escaped me why Ofgem has an office in Millbank. On the basis that generation should be done where it is best done, surely regulation of markets is best done where generation is done, and there is precious little generation done on Millbank. If the staff were to get out of their office on Millbank and into the areas where electricity generation is important, they would see at the sharp end the impact of some of the things that they seem to regard as abstract.