Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the potential merits of replacing the standing charge on household energy bills with a measure based on usage.

Although standing charges are a commercial matter for suppliers, and are regulated by Ofgem, we know that too much of the burden of the bill is placed on them. The Government has worked constructively with the regulator on the issue of standing charges, and we are committed to lowering the cost of them.

Ofgem’s proposal to move some operational costs from standing charges to unit rates would see low-income households’ overall bills reduced on average, but we are mindful of the distributional effects of changes to standing charges, particularly on vulnerable consumers.

Ofgem’s recently published discussion paper sets out the options for how standing charges could be reduced, including by moving some supplier operational costs off standing charges onto the unit rate, increasing the variety of tariffs available for consumer in the market, and in the longer term, reviewing how system costs are allocated. Ofgem's publication can be found here: https://www.ofgem.gov.uk/call-for-input/standing-charges-domestic-retail-options.