What is a Standing Charge?

There are two types of Standing Charge, which I shall call Full and Proportional.


A Full Standing Charge is a fixed monthly payment you make irrespective of how much of the utility you use, or even if you use none at all. So SC - £20, gas used £50, total bill £70. Go away on holiday and use no gas and you still get a bill for £20. Obviously utility companies love this system because it delivers a regular and dependable minimum income. Your hairdresser would love to use this system because whether or not you popped in for a shampoo and set, you would still be handing over 20 quid every month. And so would your taxi driver, your grocer, your....everyone. Why don't they do it? Well obviously because you would refuse to pay and you would shout 'thieving bastard' through their window every time you passed their place of business. And you would take your custom elsewhere.


A Proportional Standing Charge is levied on the first portion of your usage. Say the Standing Charge is £20 and the unit charge for gas or electricity is £1. For the first 20 units you use the company will bill you, not £1 but £2, so after 20 units you have paid £20 for gas and £20 for the Standing Charge. It works out the same as the Fixed Standing Charge, unless you use fewer than 20 units. If you use 5 units you pay £5 for gas plus £5 for Standing Charge, which is £10, instead of £20 Standing Charge plus £5 for gas, which is £25.


The committee chaired by the Nasty Labour Party MP thought this calculation was too complicated for dim customers (that's you and me by the way) and that all these stupid customers who were low users (again, that's you and me) would prefer, for the sake of clarity, to pay £25 rather than £10. And the Nasty Tory Party in coalition with the Nasty Libdem Party agreed.



Anglian Water used to have a Proportional Standing Charge on their So-Low tariff. But in 2015 they discovered they were missing out on lots of income from all their stupid customers. So they announced it would be phased out and replaced with a Full Standing Charge. Initially they planned to impose the new system over 3 years because the hike in people's bills would be so enormous. But public reaction subsequently prompted them to extend the phase-in to 5 years, because the pain felt by their customers would be even more than they had thought.


I wrote to Anglian Water at the time and said I thought the new system was unjust and unreasonable and that I would in future be paying only the water and sewerage element of my bills, but not the Standing Charge. I said that the proper agency to resolve this dispute between us was the Courts and I urged them to prosecute me at their earliest convenience so that everyone concerned could learn an authoritative opinion and be confident that we are all doing the right thing and paying the right price.