Energy Suppliers Pump Up Standing Charges—Small Businesses Are Paying the Price
Picture this: a small shop in Dorset lining up for its daily energy bill. In July 2021, it was already bracing for a 70p standing charge per day. Fast forward two years, and that line now stretches to a staggering £9.69—a 12‑fold jump that’s making even the staunchest budget enthusiasts blush.
Another tale from the Highlands sees a tech startup’s daily charge rise from 32p to a jaw‑dropping £7.50, adding a hefty £2,500 to its yearly expenses. These stories aren’t isolated; they represent a growing trend that’s got the Federation of Small Businesses (FSB) up in arms.
The Core Issue: Why Standing Charges Are on the Rise
- Operational Costs dominate the middle of the guide—it’s half the price, folks. While some of these costs (metering, customer support, billing) are vital, others (advertising, branding, office rent) feel like a luxury line item for the bigger players.
- Energy suppliers also pile on costs from Supplier of Last Resort (SOLR) acquisitions. The joke? Small businesses get the burden for the benefit of large energy conglomerates.
- Unlike household consumers, entrepreneurs lack an upper cap on standing charges, leaving them stranded in a flood of hidden fees.
FSB’s Bold Call for Transparency
The FSB insists on several changes:
- Clear Breakdown of how each standing charge is calculated—no magic formulas or black boxes.
- Expose any Third‑Party Intermediary commissions that sneak into the numbers.
- Remove SOLR acquisition costs from the equation—or at least shield small firms from these corporate‑levied fees.
- Work with Ofgem to eliminate regional disparities, so a business in a rural valley isn’t paying more just because it’s a stone’s throw away from the next city.
What Small Businesses Are Saying
“Even though wholesale energy prices have slipped since the 2022 peak, small firms are still left scratching their heads at the sky‑high bills.” – Martin McTague, FSB National Chair
McTague laments that “regressive billing” is stunting growth, confidence, and investment. He insists the standing charges system is on a perforation that only benefits larger suppliers, and a more transparent structure is the remedy.
The Bottom Line
Small businesses deserve a glimpse into the glass box that’s been holding the numbers dear. If standing charges stay on this steep trajectory, they’ll be left paying premium rates while larger players hoard the rewards. FSB urges Ofgem to keep fixings grounded, fair, and, most importantly, understood by all parties.
Because when you’re a small business, not having a clear idea of what you’re paying for is the worst kind of weird.
