Small Businesses Are Being Hit Hard by Sky‑High Standing Charges
FSB’s Bold Move to Bring Ofgem Into the Light
Picture this: a small business owner swallows a cup of coffee, pulls up her laptop, and discovers that her daily standing charge has ballooned from 70.94p in July 2021 to a whopping 969.64p in September 2023 – that’s more than a 13‑fold increase! The Federation of Small Businesses (FSB) isn’t taking this on silence.
FSB’s latest letter to Ofgem’s chief executive, Jonathan Brearley, is a call to action: “The specific, negative impact standing charges are having on small firms!” – a punchy plea that has already caught the eye of ministers who backed the letter for “fair and affordable bills.”
Why Standing Charges Are a Pain for Entrepreneurs
- Instead of a price cap that protects households, small businesses face no such shield.
- Much of the money paid goes into the grid, operating costs, and “policy costs” – the jargon that feels like a mystery box for company‑owners who aren’t hooked up to a Ph.D. in energy policy.
- High standing charges act as a damper on businesses’ efforts to be energy‑wise and hit net‑zero targets – they’re basically saying “cut back on energy and you’ll still pay the same daily fee.”
Rural Businesses – The David to the Corporate Goliath
It’s even worse for those in rural areas. The spike in standing charges widens the rural‑urban divide and messes with the UK’s “level up” agenda. Small farms and cottage‑industries are paying straight into the behemoth of the energy grid when they should have access to fair pricing.
FSB’s Demand for Transparency
FSB’s Policy Chair, Tina McKenzie, wants a full audit – “a thorough review of standing charges for businesses as well as consumers”. She’s not just hammering the point, she’s adding emotional weight: “small firms behave more like consumers – but they’re left in the middle of a one‑way street.”
She’s also pulling a spotlight on cost drivers. According to the FSB’s Small Business Index, 62.5% of small businesses cite utilities as a major cost driver in Q4 2023. So the energy dust‑punch is a real pain point.
Is Ofgem Listening?
Ofgem had opened a Call for Input on standing charges; FSB has filled it with real anecdotes and data. Now, the big question stands: does Ofgem have the courage to keep small firms from being “fleeced” by water‑level‑sprinting charges?
In the words of FSB: “We’re keen to hear Ofgem’s next steps to guarantee that small firms pay fair, transparent standing charges, no matter where they’re based.”
Bottom Line – Small Business Owners, Keep Your Eyes Peeled
If you’re a small business owner, you’re not alone in feeling the squeeze from those relentless daily fees. It’s a battle that’s high voltage – literally. The call to action from FSB, backed by ministers, aims for a future where standing charges are no more than a footnote, not a headline.
