Standing charges, the daily fees households pay to access the electricity and gas grids regardless of how much energy they use, reached a new high on 1 April, up 64%, according to figures from National Energy Action cited by the End Fuel Poverty Coalition1. The same date brought the end of the Energy Bills Support Scheme, which the Coalition says caused every household in the country to see bills rise by at least £67 a month1.
The Coalition, an independent campaign group, said the standing charge rise means almost half (41%) of what those in the poorest households spend on energy now goes solely on these daily fees1. It also cited Warm This Winter figures showing more than a quarter of people (29%) were already in debt to their energy companies before the price rise, and Debt Justice calculations that prepayment meter customers have combined debts of £1bn1.
The Coalition's statement set the increase against wider findings about the market:
"People are being taken for fools. The Government is saying that it is providing support to households, but the reality is that everyone's bills are going up."
The Coalition also cited a Bloomberg investigation which it said found three energy firms added half a billion pounds to energy bills by powering down generators at peak times and then demanding a higher price from the Grid1. It said that even when market conditions ease later in 2023, people will still be paying double for their energy compared with 20201.
Tessa Khan, executive director of Uplift, part of the Warm This Winter campaign, said the government's plans that week would not lower bills, that its energy efficiency policies fell short of a national insulation programme, and that it continued to deny communities access to onshore wind1. She said ministers were handing billions in subsidies to oil and gas developments that would not lower bills or boost UK energy security1.
Why it matters for households
A standing charge is charged for every day a home is connected, so it is paid whether or not any energy is used, and it cannot be reduced by using less. A 64% rise in that fixed daily amount therefore raises the floor cost of having a supply at all, before any unit of gas or electricity is consumed. For a household that already uses very little, the fixed fee takes a larger share of the total bill, which is the pattern behind the 41% figure for the poorest households1. That shifts the balance of a home's energy costs away from what it consumes and towards what it pays simply to be connected, which is the subject of debate around standing charge reform and zero standing charge tariffs and no standing charge tariffs versus standard tariffs. The Coalition's figures also indicate that debt to suppliers was already widespread before the April increase, including £1bn owed by prepayment meter customers1.
What happens next
The Coalition said campaigners were staging a mass lobby of MPs at over 70 locations across the country on Saturday 1 April1. It said that later in 2023, even when market conditions return to energy bills, people will still be paying double for their energy than they were in 20201. No further dated steps are set out in the Coalition's statement.
Sources1 cited
- Energy bills crisis continues on April Fuels Day - End Fuel Poverty Coalition, endfuelpoverty.org.uk