British energy firms told to offer ‘zero’ standing charge tariff by next winter
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Ofgem aims to provide choice as Martin Lewis describes daily fees as a ‘poll tax’ on gas and electricity bills. Energy suppliers will have to offer customers a “zero” standing charge tariff by next winter to address criticism of the daily fees described by the consumer champion Martin Lewis as a “poll tax” on gas and electricity bills.
Ofgem, the energy regulator for Great Britain, said the zero standing charge option will be offered by suppliers under its quarterly price cap, alongside existing tariffs, as part of an industry shake-up. Some suppliers already offer low- or no-standing charge tariffs but the regulator said the practice was not universal. The intervention comes at a time when households are struggling to clear what they owe with the level of debt and arrears reaching £3.8bn in September, up 91% in two years.
“Many people feel very strongly that standing charges are unfair,” said Tim Jarvis, the director general of markets at Ofgem. “We want to give consumers the ability to make the choice that’s right for them without putting any one group of consumers at a disadvantage.”.
Standing charges are flat daily fees, often likened to phone line rentals, that are charged for a gas and electricity connection and added to consumer bills regardless of how much or little energy is used. This makes them controversial – tens of thousands of Britons responded to a call for input as part of Ofgem’s consultation – as lower-income households spend a much higher share of their income on energy.
