Limp response from Scotland's First Minister

Implications: The Robert Barr article quotes Scotland's First Minister Jack McConnell as seeking assurances from the EU on the Iberdrola take over of Scottish Power, but refusing to say whether the deal would be good or bad for Scottish business. In reality the First Minister has very little say in the matter, but needs to say something as he has to fight a general election in May 2007 and is currently well behind in the opinion polls to the Scottish National Party. Energy matters are not a devolved power to the Scottish Parliament and are a reserved power for the Westminster Government of Tony Blair.

Analysis: The Westminster Government are not likely to stand in the way of this merger or in further consolidation of the EK energy supply business. Consolidation has reduced the UK market to six really big energy supply companies: RWE Npower, E.ON Powergen, Centrica, EdF Energy, Scottish & Southern Energy and Scottish Power. Scottish Power was the smallest of the six and was ripe for take-over due to losing its way in its US investments before selling out to Warren Buffet's Mid American Holdings, and sacking many of its senior managers. Iberdrola looked at Scottish and Southern before deciding Scottish Power was an easier target. With four of the Big Six UK energy suppliers now subsidiaries of major European energy companies, Centric and Scottish and Southern Energy may also be vulnerable to takeover.