Consumer Scotland published its response to the Ofgem consultation on lower standing charge tariffs on 4 November 20251. The consultation proposes new rules stating that energy suppliers must offer their customers at least one lower standing charge tariff option1. Consumer Scotland is the statutory body for consumers in Scotland, established by the Consumer Scotland Act 2020 and accountable to the Scottish Parliament2.
The body said it agrees with making the change temporary in the first instance, and that a review in two years would allow the policy to be assessed alongside expected increases in network costs from 20262. It said it considers Ofgem's Cost Allocation and Recovery Review (CARR) a better vehicle for deciding how different cost categories are recovered and from whom2.
"We are concerned, however, that narrow changes in the context of standing charges could benefit some consumers while leaving others worse off."
Consumer Scotland raised the risk of cost under-recovery. It said the consultation provides limited detail on how Ofgem will monitor and prevent systematic cost shortfalls, which may require more costs to be recovered from consumers on standard tariffs2. It noted that Ofgem has rejected cross-subsidisation in relation to previously proposed zero standing charge price cap variants, and asked for clarity on whether cross-subsidisation is permissible under the current proposals2. It also recommended that Ofgem consider further guidance or obligations for suppliers and price comparison services so that tariff comparisons are accurate and not misleading, warning that monthly or quarterly consumption data may give a misleading picture of the best value tariff2.
| Point | Consumer Scotland position |
|---|---|
| Duration | Temporary in the first instance, with a sunset clause2 |
| Review | Two years, to account for network cost increases from 2026 and CARR changes2 |
| Cost recovery | CARR seen as the better route for holistic decisions2 |
| Under-recovery | Limited detail on monitoring and prevention2 |
| Comparisons | Further guidance or obligations may be needed2 |
Why it matters for households
Standing charges are a fixed daily cost paid regardless of how much energy a home uses, so they fall hardest on low-usage households. A lower standing charge tariff would shift more of a bill onto unit rates, which changes who pays what. Consumer Scotland's warning is that this redistribution could leave some households worse off, particularly if costs under-recovered from lower standing charge customers are recovered from those on standard tariffs2. For a home weighing up standing charge reform, the practical question is whether a full year's consumption, rather than a summer month, supports the switch2. The body's evidence sits alongside the wider work of energy consumer bodies in Scotland and the tariff rules that Ofgem sets for suppliers.
What happens next
Consumer Scotland recommends Ofgem set out early indicators of what success looks like, so a continue or discontinue decision can be made transparently in two years2. It also recommends Ofgem consider whether further guidance or obligations are needed for suppliers and price comparison services2. No date for Ofgem's decision has been reported.