Standing charges have been branded an “energy poll tax” by one of the leaders of the Scottish campaign against Margaret Thatcher’s controversial local government finance reform introduced during the 1980s.
Kenny MacAskill, who is now an MP for the breakaway Scottish nationalist Alba Party, used a House of Commons debate on household energy bills to liken the standing charges to the similarly flat rate poll tax, which sparked riots following its introduction north of the border in 1989.
Pointing to figures from National Energy Acton (NEA) that show household are now paying more than £300 on average in standing charges, he said: “It is an energy poll tax that hits the poorest hardest.
“The billionaire with his swimming pool pays the same as the widow with her kids in a council flat. Charges vary across the country, with those in colder Scotland paying a higher rate than those here in London.”
Overall, it is “the poorest and most vulnerable feeling the most pain” from high energy bills, he said: “Those facing this crisis with the burden weighing them down are not the feckless or ne’er-do-wells who never seek to pay their way, but the poorest and most vulnerable in our society.”
MacAskill, whose name hit the headlines worldwide when he presided over the transfer of convicted Lockerbie bomber Abdelbaset- al-Megrahi back to his native Libya as Scottish justice minister, backed NEA’s calls for energy debts to be written off.
A write-off could avoid becoming a “blank cheque for others simply to cease paying” by time-limiting to debt incurred during the energy crisis, he said: “Banks were bailed out. Wastage of personal protective equipment, if not fraud, has been written off.
“It seems that there are unlimited funds for weapons of war, but not for a war on poverty. If assistance can be given to the few, similar support should be provided for the many.”
Ofgem has recently explored shifting 50% of current standing charges onto unit rates in response to growing pressure about the unfair impact of standing charges on some low income customers.
However, the proposal has had a mixed reaction. Ovo warned that shifting bill costs from standing charges to unit rates could deter households from switching to electric heat and vehicles, with knock on consequences for the transition to net zero.
The Committee on Fuel Poverty, meanwhile, urged Ofgem to consider mandating “a variety of tariffs” to make energy billing fairer for low-income households. The government advisory body has suggested the tariff mandate to replace standing charges, which are applied at a flat rate across all billpayers.