Martin Lewis issues energy bill warning over Ofgem rule costing people £100

Martin Lewis has issued a standing charge warning as Christmas nears. The BBC Sounds and ITV star Mr Lewis has said he believes that energy regulator Ofgem will reject its consultation to drop standing charges, cutting bills by as much as £100, as they will be unable to do so without Labour Party government support.

It comes after the price cap – which sets a maximum rate per unit and standing charge for energy use – is set to rise by £21 for an average household per year or around £1.75 a month. “You have to put support in for those small number of vulnerable high users at the same time as bringing standing charges down and we haven’t got that support,” the MoneySavingExpert founder urged the government.

Last year Ofgem started a review of standing charges which began with an online consultation that received more than 30,000 responses from customers, consumer groups, charities and others. Now it has published an options paper on ways to reduce standing charges for households and has asked billpayers for their opinions on the proposals.

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The options paper also sets out long-term considerations relating to the assignment of network costs, as a part of a broader review of how electricity and gas system costs are recovered from users. However, households only have until September 20 to submit their views.

Ofgem explained: “The options in the paper could reduce the standing charge by between £20 and £100 per year by transferring parts of these fixed supplier costs to the unit rate (the price paid for every unit of energy used). We know that if these changes are made it could affect people who cannot safely reduce the amount of energy they use. This could be because of their dependence on life-saving medical equipment or living in a low standard of housing with poor insulation.

“We are asking energy suppliers to offer energy tariffs that have no or low standing charges as well as their current tariffs. This will mean that energy efficient households will be able to choose a tariff that rewards them for using less energy. It will also mean that other energy customers can also choose from more tariffs that meet their needs.”