The Scottish Government claims that these reserved powers restrict any actions it can take to mitigate the worst effects of the cost of energy to Scottish domestic and business consumers.
But is that really the case?
Using a flat rate per metre negates the need for a valuation of the piping and cabling system. Each distributor has plans of their pipes and cables, so no survey of their length is required. The proposed tax is simple, easy to operate and can’t be avoided. Unlike other taxes, it is not based on assumptions or behaviour but an existing object. It can be introduced very quickly with political will.
No doubt the reaction from consumers would be almost universally favourable since ‘free’ energy would lighten the burden on the many struggling households, businesses, councils and charities. The Scottish Government would also require offering some solace to the minority of mostly rural consumers who do not receive mains energy supplies.
The energy distributors themselves may be less enamoured, yet even they could see a benefit given that their parent companies make substantial profits from exporting much of the energy which they generate in Scotland. If they tried to increase energy charges in Scotland, the Scottish Parliament could just increase the tax rate per metre. Furthermore, the rates or tax payable to the Scottish Government reduces the profits of the distributors. Consequently, their liability to pay Corporation Tax to HMRC would substantially reduce./
There will be those who will claim that such a provision would be struck down by the British Government under the United Kingdom Internal Market Act 2020 which seeks to create a ‘level playing field’ for goods and services within the UK. I’m confident that such a challenge would be unsuccessful. However, the court of electoral opinion is likely to be much more immediate and potent. The United Kingdom government is playing fast and loose with the Devolution Settlement. It ignores Sewell conventions and undermines the powers of the Scottish Parliament at every opportunity. Until now these machinations have affected a small section of our population. However, since everyone is affected by the cost of energy, any attempt to thwart such legislation could lead to a substantial and final rejection of the Union at the forthcoming General Election.