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 standing charges on the level of energy bills.

The Government knows that, for many consumers, too much of the burden of the bill is placed on standing charges. Ofgem have conducted a broad public consultation to understand the views of consumers on this issue, receiving over 5,000 responses on their 2024 discussion paper. Ofgem judged that if standing charges were fully removed, the fixed costs of the energy system would still need to be recovered, and unit rates would therefore need to increase. In Ofgem's view, this introduced a risk of harm for vulnerable consumers who are high users of energy, often for medical and health needs. Since then, Ofgem have been continuing work in two areas.

Firstly, Ofgem have been working to ensure that domestic consumers can choose tariffs with lower standing charges. Ofgem took a further step towards this goal on 24 July, announcing proposals to require suppliers to offer their customers tariffs with lower standing charges from early 2026.

Ofgem’s consultation on these proposals closed on 23 October, and they will provide a further update in due course.

Secondly, Ofgem have been reviewing how ‘fixed’ costs, which tend to be funded through standing charges, should be recovered in the future energy system. This includes whether those fixed costs could be recovered in more progressive ways, and we are working closely with the regulator on this.