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The Scottish government will be unable to finance its own energy industry if it gains independence in next year’s referendum, according to the UK energy minister.
Speaking in Manchester at the Conservative Party conference, Michael Fallon said Scotland’s renewable, nuclear and potential shale industries would suffer if the union is broken up.
He told delegates: “The UK as a whole pays £500 million a year towards renewable energy in Scotland: 40 per cent of total UK for funding for renewables goes to just 10 per cent of the population.
“A separate Scotland could not afford that scale of support and would have to finance it by higher borrowing, lower public spending elsewhere or increased taxation.”
Fallon added that the UK government is able to table incentives for shale exploration because the treasury “stands behind it”, adding “A Scottish government itself could not incentivise the search for shale in the central belt of Scotland.”
The energy minister also told delegates: “The £15-16 billion to build the Hinkley station we’re negotiating with at the moment – the sums involved in replacing the nuclear fleet – whether it’s in Scotland or in England – are huge.
“The guarantees that are being negotiated, covering 20, 30, 40 years of operation and construction – these are things that an only rest with the UK treasury.
“These are not things the Scottish government could possibly finance on its own without knocking a huge hole in its other spending plans.”
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