IN May 2016, during a last-minute push in the Brexit campaign, Boris Johnson and Michael Gove told the Sun that “fuel bills will be lower for everyone” if the UK left the EU.
In the interview, entitled “EU’ll Never Believe It: Boris promises cheaper household gas bills if Brits back Brexit”, Johnson and Gove argued that the “unfair and damaging” 5% minimum VAT on domestic energy bills imposed under EU regulations “hits the poorest hardest”.
Seven years on, the future for UK energy consumers looks bleak, particularly for those on the lowest incomes. The VAT on energy bills remains intact, and households face a 54% rise in the energy price cap come April 1 – an average increase of £693 per year on their bills.
However, focusing on the annual figure increases of £600-£700 makes it difficult gauge how the prices will change depending on gas and electricity use.
There has also been little focus on the price increase to standing charges for electricity and gas – a fixed daily charge applied to households connected to an electricity and gas supply.
In essence, even if you don’t use any electricity or gas for a week, month, or year, you will still face a minimum charge – which is also set to rise on April 1.
On February 3, financial journalist and broadcaster Martin Lewis tweeted the planned increase for average price cap unit rates and standard charges for gas and electricity.
Here are the average price cap unit rates and standing charges for gas and electricity if you're paying by Direct Debit (do note they vary by region)… #MartinLewis pic.twitter.com/W3PSr3D3H9
— Martin Lewis (@MartinSLewis) February 3, 2022
The figure charges show that the current cap and standing charges on gas and electricity (for consumers paying by Direct Debit) lie respectively at 26.12p a day (4.07p per kWh) and 24.88p a day (20.8p per kWh).
From April 1, 2022, these prices are set to rise to 27.22p a day (7.37p per kWh) for gas, and 45.34p a day (28.34p per kWh) for electricity.
This means that the average daily standing price for gas has increased by 1.1p, 4%, whereas electricity is set to increase by 20.8p per kWh, or 82%.
This disparity is notable, especially considering that it has been the increase in the price of wholesale gas which has consistently been used to justify the massive price hikes.
READ MORE: Energy bill rise: Michael Matheson warns there is 'real risk of deaths'
The massive increase to standing charges on electricity means that consumers who actually use less electricity – such as pensioners or those in low-income households, who may already go without the use of domestic electric appliances such as dishwashers, tumble dryers and other electronics such as computers – cannot “cut down” on usage to compensate for the hike in electricity standing charge.
With Scottish energy secretary Michael Matheson warning on Monday of a “real risk” people could die in the months ahead with the country facing its highest hike in fuel bills yet, it would seem a good time for Johnson to make good on his 2016 Brexit promise.
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