Consumer Scotland published its response to Ofgem's technical working paper on mandating lower or zero standing charge tariffs on 13 October 2025. The independent consumer body said it is not convinced that a radical rethink of the standing charge should be a priority at this point, and warned that some options could leave most households paying more.
The response states that the standing charge recovers the fixed costs of providing a supply to a premises, and that any mechanism letting some customers avoid those costs means others bear a larger share. Consumer Scotland said an outright ban on standing charges "could result in a majority of customers paying more than they do currently", and that enabling some households to avoid system fixed costs "would shift these costs to other households, which could include the vulnerable or those less able to engage".
"We are not convinced that a radical rethink of the standing charge should be a priority at this point in time"
The body raised the risk of seasonal switching, where low-usage consumers move to zero standing charge tariffs in summer and back to fixed standing charge tariffs in winter, leaving suppliers with an unrecovered fixed-cost gap. It said a minimum consumption threshold may reduce some of that risk, but that setting and policing a threshold is likely to be complex for suppliers, particularly when household circumstances change suddenly. It also said consumer protection rules should apply equally to all suppliers unless there is a clear rationale for excluding some, and that it is not clear such a rationale exists for limiting a requirement to large suppliers.
Consumer Scotland set out alternatives it considers lower risk. These include suppliers doing a better job of signposting low-usage customers to existing low and zero standing charge tariffs, tightly defined pilots to test real-world impacts, and, if Ofgem goes further, a broad principles-based requirement for suppliers to offer a variety of tariffs for different usage levels. It said eligibility for any trial should be targeted at a small group of consumers, potentially prepayment meter customers, with comprehensive protections and tailored communications to reduce the risk of self-disconnection and help households budget for higher winter bills. Restricting eligibility to smart meter customers could allow more sophisticated pricing and act as a pull factor for smart meters, it added.
The response supports Ofgem's wider Cost Allocation Review, which is examining whether the costs currently in the standing charge are the right ones, how they vary by location, time and type of use, and whether affordability should be taken into account. Consumer Scotland said fixed network and policy costs are likely to rise as part of the net zero transition, while wholesale prices should become less volatile, and that Ofgem's own research shows consumers moderate their wish to scrap the standing charge once its purpose and trade-offs are explained.
Why it matters for households
The standing charge is paid regardless of how much gas or electricity a home uses, so it falls hardest on low-usage households. Consumer Scotland's position is that removing or cutting it does not remove the underlying fixed costs of the network and supply; it moves them onto unit rates or onto other customers. For a household weighing a no standing charge tariff against a standard one, that means the comparison depends on annual usage, and the trade-off is between a lower fixed daily cost and a higher price per unit. The response notes that low and zero standing charge products already exist, and that signposting to them is weak. It also notes that any shift of fixed costs onto other households could land on those less able to engage, which bears on how fairly the costs of a home's connection are shared. The wider questions about what belongs in the standing charge sit with Ofgem's Cost Allocation Review, and the regulator's remit covers how those costs are recovered.
What happens next
Consumer Scotland has answered 8 of the 11 questions in Ofgem's technical document, leaving questions 2, 6 and 10 unanswered. It recommends that any policy be assessed through a structured, iterative review covering uptake, pricing behaviour, consumer understanding and consumer outcomes, and says success should not be judged on take-up volumes alone. It points to existing supply licence conditions, including SLC 0, SLC 25, SLC 31F and SLC 31I, as sufficient obligations for suppliers to inform customers about better tariffs, enforceable through Ofgem's existing compliance mechanisms. No dates for Ofgem's next steps are given in the response.