Labour ditches plan to charge south more for electricity

Ed Miliband has abandoned plans to charge southern electricity users more than those in Scotland after senior officials warned it could put off investors and make it more difficult to build renewables.

- Kiran Stacey

Sources have said the government has decided not to proceed with the scheme, known as zonal pricing. The decision will be announced once it has been signed off by the cabinet.

The plan was proposed by the Conservatives as a way to encourage industry to relocate to areas that have more generation, such as Scotland, where windfarms are sometimes paid to switch off if renewables threaten to overwhelm the grid.

The proposals were heavily backed by Greg Jackson, the founder of Octopus Energy, but led to a backlash among other energy firms including SSE, Scottish Power and RWE.