Ofgem to cut daily charge from bills after Martin Lewis fury

Ofgem is looking at making cuts to hated standing charges for gas and electricity supplies into British homes.

It follows a concerted effort by TV finance expert , who has crusaded against the fee he has branded a "poll tax on energy use," and other campaigners.

Energy watchdog is now considering what shape the cuts will take following an overwhelming response to a consultation.

The standing charge is a daily charge that you pay your energy supplier each day to cover fixed costs of providing gas and electricity, regardless of how much energy you use.

The standing charge is used to recover the costs required to provide energy company services, including providing and maintaining the wires, pipes and cables that deliver power to a customer's door, through to the staff and buildings required for the energy business to function.

One campaigner against standing charges, from Market Rasen Lincolnshire, has received a letter from Ofgem, via his MP Sir Edward Leigh MP, setting out the timetable.

The letter said: "The call for input received an exceptional response from the public, with over 30,000 responses.

"The responses overwhelmingly called for a significant reduction in standing charges, with many calling for standing charges to be abolished completely.

The options paper highlights the choices Ofgem is considering and explains the trade-offs if changes are implemented that could disproportionately affect low income and customers who are unable to reduce their energy use safely.

But, the letter warned that if the standing charge facility were to be completely scrapped, suppliers "would still have to cover their

reasonable costs in other ways". This could "mean charging a higher price for every unit of power used," it warned.

Mr Lewis discussed the news on Good Morning Britain (GMB) alongside Susanna Reid.

He was asked when the cuts would come in.

He said: "Well people know I've been one of those leading the campaign on reduce standing charges. I think it's a moral hazard, it's a poll tax on energy use that you're paying over £300 a year even if you don't use any energy.

"There is a consultation being put out on it. The submissions to that consultation closed on September 26. They're planning to shift some of the standing charge to the unit rate which causes a problem for high users, vulnerable high users.

"But that's the nature of it. So I think we're probably still a few months away from an announcement on that [standing charges]. But at least we're in the process now."

Talking about the same issue on his MSE blog, Martin Lewis explains: "Keeping the standing charge high means lower users can save proportionately less and less by reducing usage - that disempowers them - and is a disincentive to energy reduction generally, which is not great for the environment."

He warns that some prepayment users can find themselves in energy debt during summer as despite them not using energy, "the meter is still ticking over because of the standing charge". Calling it a "terrible, unnecessary situation for the payment type used by many of the most vulnerable"

Martin Lewis is now wanting for the standing charges to be lowered adding that "MSE has submitted our consultation response to a new Ofgem proposal on this about shifting some of the cost of the unit rates."