Angus MacDonald has called on the UK Government to go further in tackling fuel poverty in the Highlands following new energy pricing reforms.
The intervention comes after Ed Miliband and Rachel Reeves announced plans to break the link between electricity prices and wholesale gas costs.
Under the current system, electricity prices are driven by the cost of gas, meaning households can see bills rise sharply even when their power comes from renewable sources such as wind or solar.
The Government’s reforms will see older low carbon electricity generators offered long term fixed price contracts, aimed at shielding consumers from future spikes in gas prices.
Generators that opt out of the scheme will face a windfall tax, while the Electricity Generator Levy will be extended beyond 2028 and increased from 45% to 55% from 1 July 2026.
Angus MacDonald said:
“Renewable energy is far cheaper to generate than oil and gas, yet in the Highlands, where energy generation exceeds local demand twelve-fold, 47% of households still experience fuel poverty.”
“The coupling of electricity prices to wholesale fossil fuel costs on the international market is a big part of this.
“This is an issue I have raised repeatedly with Energy Minister Michael Shanks, going back to February 2025, and it was also a Liberal Democrat commitment in our 2024 manifesto.
“The Government may be late to the party, but today’s announcement is welcome nonetheless.
“However, if Ed Miliband is serious about accelerating the shift to renewables, he should go further and make concrete commitments to the communities whose land will host the energy infrastructure.
“The Government’s decision to increase the Electricity Generator Levy means it will be collecting significantly more in taxes from windfarms.
“That money should be used to fund meaningful community benefit packages, ensuring that those who host the infrastructure are not left behind but instead share properly in the wealth their land helps to create.
“We need help.
“In the Highlands, fuel costs for our cars and the distances we must travel to access essential services mean our living costs are exceptionally high.
“The Treasury is on track to collect an extra £2 billion over the next three months as a result of higher fuel prices.
“This windfall should be used to help those most affected: by cutting fuel duty by 10p, zero-rating VAT on LPG and heating oil, and cutting bus and rail fares for three months.”
MacDonald’s comments highlight the continued pressure on rural communities, where energy generation is high but household costs remain among the highest in the UK.
The reforms mark a shift in how electricity is priced, but the wider debate over how the benefits of renewable energy are shared is likely to continue.
