00:00On the basis of these tests, I have concluded that the right approach is reformed national pricing, and I want to set out to the House why.
00:05First, the fairness test. Under reformed national pricing, there would be one national wholesale price, as now.
00:12And as I have said, under zonal pricing, there will be different wholesale prices in different zones,
00:18with lower prices tending to occur in zones with more renewable energy and a smaller population,
00:23and higher prices in those with less power and more people.
00:26Now, obviously, this will be a significant departure from the current system,
00:30which, while it has some differences in network costs, means wherever you live, you pay the same wholesale price for each unit of electricity.
00:38The challenge will be obvious to the House.
00:40People and businesses could find themselves disadvantaged through no fault of their own, and many would see it as unfair.
00:46Such a so-called postcode lottery is, in my view, difficult to defend.
00:50Now, the government has considered whether it would be possible to mitigate these effects under zonal pricing,
00:55and we've concluded that, while it might, it would be a very complex and uncertain process,
01:00and it would be even more challenging to do so for large businesses, given the way they purchase electricity.
01:06So, firms in higher-priced zones, such as the Midlands, Wales and South of England,
01:10would therefore face damage to their competitiveness.
01:12People in higher-priced zones, depending on what they're around-priced zones,
01:14they're nearly wy9 50p s.
01:23And they do rural Moderna of Creation in higher-priced zones.
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