DIFFERENCES in standing charges on electricity bills will see people in Scotland charged over 50 per cent more than their counterparts in London.
House of Commons research published at the end of August makes clear the different standing charges – the fixed daily amount that people must pay regardless of their energy usage – across the UK.
While standing charges for gas will be uniform across the UK, electricity charges vary massively.
What are the different standing charges?
The research shows that, for customers on a direct debit, the standing charge in North Scotland will be 51.1 pence per day (ppd), and South Scotland will pay 50.7ppd. In London, it will be only 33.2ppd – meaning people north of the Border will pay between 52 and 54% more.
Scaled up, this means that a person in North Scotland will pay £186.51 per year on standing charges for electricity, while someone in London pays £121.18.
London has the lowest standing charges in the UK. The average price is 46.4ppd for people on direct debit.
SNP international trade spokesperson Drew Hendry said the differences were “plainly wrong” and showed “the fundamental flaws that exist within the system”.
The costs laid out refer to the amount which will be charged under the “Q4 2022 price cap”. Announced on August 26 and due to come into effect on October 1, this price cap rise will see the average UK household’s energy bills go up by 80.06%.
There is also variation depending on how people pay their bills.
For people on pre-payment meters – often the most vulnerable in society – the standard charges in Scotland are 5p higher per day (56.1ppd for Northern Scotland and 55.7ppd for Southern Scotland), and in London they are 6.1p higher (38.3ppd), than their counterparts who pay by direct debit.
Across the UK, the average standing charge for people on prepayment meters is 51.4ppd.
There is also variation in electricity unit price (measured in pence per kilowatt hour – p/kWh) according to payment method and region.
The range in unit price is much smaller than the range in standing charges (19.6ppd vs 3.7p/kWh, for people paying by direct debit).
The House of Commons research suggests that on standard usage – which it defines as 2900 kWh per year for electricity – the average consumer will pay between £1635 and £1738 depending on their region.
'This is plainly wrong'
SNP MP Hendry said: “Whether it’s on transmission charges or standing charges, consumers and energy producers in the north of Scotland have been consistently shafted and made to pay massive premiums for energy.
“And many are rightly left scratching their heads as to why, given the north of Scotland is one of the most energy-rich parts of the UK, and on top of a spiralling cost of living and energy crisis we have homes in the region who’ll have to fork out even more for their bills.
“This is plainly wrong and shows the fundamental flaws that exist within the system, with urgent reform needed to end the energy price discrimination that unfairly targets those who live in the North of Scotland.
“If the Tories won’t act on this, just as they’ve sat on their hands through this crisis, it’ll only go to show that only with the full powers of independence can we deliver a fair deal for everyone across Scotland.”
Scottish Green MSP Mark Ruskell echoed Hendry (above) in saying the electricity standing charge “is fundamentally unfair and symptomatic of a broken energy system”.
Ruskell went on: “Many of the areas that pay the highest charges are the ones that have the coldest weather and the least daylight. They are often communities that already suffer from disproportionate levels of fuel poverty, with those living off-grid facing even higher prices.
“Our energy policy needs to work for people and the planet. It must be more transparent, and the focus must be on lowering prices and helping the millions of people who are struggling to pay for even basic energy needs."
Gas standing charges, while being uniform across the UK’s nations and regions, also vary by how people pay their bills. For people paying by direct debit the cost is 28.5ppd, for people paying by standard credit it is 33.5ppd, and for people on pre-payment meters it is 37.5ppd.
An Ofgem spokesperson said: “We have continued to listen to representations from consumer groups on this issue, and are currently reviewing the structure and make up of standing charges to ensure they are fair for all consumers, and will be coming forward with our thinking very soon.”
