Oral Answers to Questions

Debate between George Freeman and Patricia Gibson

Tuesday 29th March 2022 Commons Chamber

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

5. What recent assessment he has made of the potential effect on consumers of removing standing charges on energy bills.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

As the hon. Lady knows, the standing charge is designed to reflect the costs of connectivity and usually covers the fixed costs that the suppliers incur. If it was removed, that cost would simply be passed on to consumers. Standing charges are a matter for Ofgem, which has launched a call for evidence. The Government are focused on helping consumers through the £9 billion package of relief announced by the Chancellor a few weeks ago and the £5 billion announced last week to help families and households with the cost of fuel.

[Patricia Gibson]

From this Friday, households will face an average 80% increase in standing charges for electricity. Negligent policy making and bad practice in the industry will be paid for by the poorest and most vulnerable consumers, who will pay the highest standing charges, with those in Scotland amongst the hardest hit. Will the Minister consider capping or even scrapping these standing charges on the basis that they are discriminatory to the poorest and most vulnerable consumers?

[George Freeman]

If it was as straightforward as that, the answer might be simple, but it is not—[Hon. Members: “Yes it is!”] No, it is not. The energy market is extremely complex, and there is a whole raft of charges. It is not true to say that Scottish consumers are hit particularly hard, as Scotland is also a net exporter and English and Welsh consumers are paying for it. The Government are absolutely focused on helping consumers with the cost of energy through the £9 billion relief announced in February, the £5 billion announced last week, the extra money for the warm home bonus and all the support mechanisms for the vulnerable. It is not simply a case of constantly tinkering with market price.