Baroness Ros Altmann, a former pensions minister, criticizes the unfairness of standing charges and their impact on the poorest and single households. She argues that energy suppliers have been allowed by the regulator Ofgem to increase standing charges to cover the costs of failed energy suppliers, which she deems even more unjust. Regardless of how much these households try to reduce their energy consumption, they cannot evade the standing charge.
Peter Smith from National Energy Action expresses concern over the significant increase in standing charges since the introduction of the price cap four years ago. Despite the mounting criticism, Ofgem has overseen this trend, particularly affecting low-usage households.
Ofgem is about to unveil the new energy price cap for the period of October to December. Jonathan Marshall, an economist at the Resolution Foundation, predicts that while Ofgem may claim that the average household energy bill will decrease this winter, more than one-third of households in England could experience higher bills compared to the previous winter.
Marshall explains that the increase in standing charges can be attributed to various new costs, with the most significant being the expenses incurred due to suppliers going out of business. However, he questions whether raising standing charges is the fairest way to distribute these costs.
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