2.2.3
Continuing on, the Bridgeman et al report conducted a
case study in 2002 and found that “despite low-income groups
benefitting more than most groups from the removal of the
standing charge, 76 per cent of the poorest decile were still worse
off” (2015, p. 50). It should be noted that this case study uses
evidence that is two decades old, and energy bills have increased
since due to recent wars and the COVID 19 pandemic. This then
exacerbates the devastating impact standing charges can have on
the lower income households.
2.2.4
While a nuanced percentage, the standing charge fee
protects homeowners with electric vehicles who consume a lot of
electricity as a transport cost. If standing charges were abolished
the skyrocketing price per unit would heavily discourage the
viability of owning and EV, especially in more rural counties of the
UK.
3. Should companies be allowed to provide cheaper bills to those who
choose to pay by direct debit?
3.1 For the past decade Ofgem has been regulating for this issue of
price differentials for different payment efforts, in 2009 they regulated
this difference to £80 between the former and other methods such as
standard credit or prepayment meters (Ofgem, 2014)
3.2 The benefit of allowing cheaper bills to those paying under direct
debit include the rewarding of guaranteed money to energy companies.
The standing order like nature of direct debit could be encouraged by
companies to strengthen guaranteed income, even if each individual
payment is smaller from the price reduction, there is an incentive for
more households to switch to a direct debit scheme.
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