Martin Lewis is disappointed. Poor bloke. Tries his hardest to convince Ofgem or the Government to make things fairer for us all on the energy front but his efforts just fall on deaf ears. What’s getting his goat this time? Standing Charges.
You can take a regulator to water but you can’t make it drink. And in the case of Ofgem, I wouldn’t have even bothered. Or I’d have pee’d in the trough beforehand!
The difficulty Ofgem face is that they are desperately trying to serve 3 masters: The Government, Energy Suppliers and the Consumer in that order. We’re at the very bottom of the pecking order and likely to remain thus until the end of time.
As Martin clearly points out in his latest newsletter, having consulted endlessly on energy and asking us all what we want done to make standing charges fairer, Ofgem is getting ready to press the feather pillow down firmly over our energy consuming faces to smother any possibility of changes benefitting consumers particularly the vulnerable.
I feel for the bloke as he's one of my heroes but ever the cynic and having bombarded Ofgem with emails myself as part of public consultations then I always felt these exercises were no more than lip service. A sop to the public. It’s that kind of ‘look we’re trying to do something about all this energy nonsense’ but with no actual intention of doing anything that might rock the boat with their other two paymasters.
And as I’ve blogged ‘til I’m blue in the face (channelling my inner smurf) on things like standing charges – the biggest stumbling block Ofgem face to reducing these is Government policy itself. Stealth green levies and all those other things snuck into our bills. Therein lies the problem.
Granted the cost of running the National Grid and infrastructure to supply energy has to be paid for by every consumer. I’m more than happy for that to be kept in as a ‘standing charge’ on energy bills it’s the other crap that gets lumped into this category that needs to be sorted.
Martin’s diagram showing a breakdown of what typically makes up your standing charges explains it rather clearly:
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| Breakdown of a typical standing charge |
If you were to deduct those amounts from bills that make up what I deem to be items that shouldn’t form part of a standing charge such as:
Policy costs - £22.10
Adjustment Allowance – 90p
Payment Method Uplift - £9.80
Headroom Allowance - £2.80
That would knock at least £35 off your standing charge straight away.
Policy costs ie the stealth green levies, propping up the elderly or keeping work dodgers warm should be paid for out of general taxation or met from any energy windfall taxes levied by the Government.
Consumers should not be responsible for debts or provision for the unexpected as suppliers should be setting monies aside from the Profit segment to cover these things.
And as for the Payment Method Uplift. That’s a bit of a hefty chunk isn’t it and should already form part of the Operating Costs segment. As long as customers pay their bills, do we really need a surcharge for the different methods of paying it?
In reality, too much is woven into the existing standing charge that perhaps should not be in there in the first place and that’s what makes it a minefield to unravel.
No mention of Social Tariffs for the vulnerable coming out of any of the consultations. Of course not; that would be too logical and not make anyone any money would it?
Standing charges, sitting ducks. Whatever way you slice it or dice it, the money’s got to come from somewhere for someone. The Government would prefer all of us to foot the bill for the vulnerable which is why those that can pay their bills are subsiding those that can’t. This is again hidden in that Policy Costs segment. How else can they offer winter fuel payments or warmer homes discounts to those on benefits without hiking up taxes?
I may as well give 90 yr old Doris fifty quid every month just so she can toast her teacakes on the gas fire to have with her Horlicks every afternoon whilst I shiver in my shreddies unable to switch the boiler on. This is basically what standing charges amount to.
Good luck Martin in trying to convince Ofgem to change things for the better. We’re all grateful that someone’s got the energy to fight this battle because my candle’s burnt out at both ends! Quack! Quack!
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