The police (here in Scotland or pretty much anywhere) can arrest someone on suspicion of something with pretty minimal evidence, you don't need a warrant but once you have arrested them you then have to either charge them or release them within a relatively short space of time (our rather draconian anti-terror laws which mean they can be held for weeks without charge wouldn't apply here).

It makes no sense for them to arrest him without evidence. The two options for who arrested him are local or national police.

If it were the local police why would local police on a sparsely populated island with little crime go and arrest someone and accuse them of being a hacker with no evidence knowing that he'd be out in a day? It makes no sense to do so and if you did do it you certainly wouldn't go public with the arrest knowing you had no evidence.

On the other hand if you're national police working in cyber crime out of London, to make the arrest you've got to convince someone to pay to fly two officers six hundred miles north and them and the suspect back. Given that UK police are being asked to make massive budget cuts and are under significant scrutiny (particularly the Met who would likely be heading this) because of the phone hacking, that trip isn't getting signed off without someone convincing a senior officer that there was something to it.

So the chances of there being no evidence is basically nil. The evidence they have may be misinformation, or they may have misinterpreted it, but they will have believed that this guy was involved.