'Fix energy back-billing, Standing Charges, broken smart meters and more', MPs urge in new report citing Martin and MSE

In its report published today (Wednesday 29 October), the Committee has put a list of recommendations to the Government calling on it to reduce energy costs for all, rework the smart meter rollout, strengthen the Energy Ombudsman, and crack down on belated back-billing. Below is a rundown of the key points.

Commenting on the report, a spokesperson for the Department for Energy Security and Net Zero said: "We are delivering reforms that put consumers first."

Back-billing should be 'limited to six months for customers with smart meters'

The Committee has recommended that energy back-billing be limited to six months for customers with smart meters. It's also called on energy regulator Ofgem to publish annual data on the penalties it issues to energy suppliers when they breach back-billing rules.

Currently, energy firms are banned from hitting you with an unexpected bill for energy used over 12 months ago that you haven't been correctly billed for before. But more than 3,000 complaints have been made to the Energy Ombudsman about wrongful back bills – a number that likely doesn't represent the total number of customers who have received one, as complaints that are resolved by suppliers do not reach the Ombudsman.

In an evidence session to the Committee earlier this year, Martin highlighted a "systemic problem of a lack of enforcement of the back-billing rules". He said that Ofgem's rules, which do not apply if a customer has "acted unreasonably" are poorly defined, leaving many complaints about wrongful back-bills in a grey area.

Martin also argued that the back-billing period should be cut from 12 months to six – as there's no reason bills should take longer than this in our modern digital age. When giving evidence this March, Martin said: "We have a systemic problem of a lack of enforcement of the back-billing rules and a flaccid Energy Ombudsman, which is a real problem."

Energy Ombudsman powers must be strengthened or it will 'remain toothless'

The Committee has urged the Government to strengthen the Energy Ombudsman's powers and to make referrals to the service automatic. Without statutory powers, it said the service "remains toothless, which undermines the confidence of consumers to seek redress and emboldens suppliers to ignore its rulings".

It recommended that the Government puts the Ombudsman on "a statutory footing" and requires it to publish compliance data. This June, the Government had promised to consider strengthening the Energy Ombudsman's powers, cutting the waiting time before complaints can be escalated from eight to four weeks, and making escalation automatic.

MSE has long campaigned for Ombudsmen across major industries to be strengthened. Martin told the Committee that the Energy Ombudsman is "not really an Ombudsman" and said it contrasted it with the Financial Ombudsman, where almost all rulings are obeyed.

Katie Watts, head of campaigns and policy at MSE, added that legal options are the only alternative route for consumers when suppliers refuse to comply, yet many feel that pursuing a resolution in the courts is not worth their time, money or stress. She said at the time: "There is no point in having the Ombudsman scheme if nobody can hold the energy firms to account."

Standing Charges need deeper reforms

In its report, the Committee said it welcomes "Ofgem's ambition to reassess how costs are allocated" across bills, but added that it is "unconvinced that its proposals for a mandatory zero or low Standing Charge tariff option will go far enough to address the inherent unfairness of the existing arrangement of Standing Charges".

The Committee has also recommended that people who have converted their home to electrical heating and don't use gas anymore should not be required to pay the gas Standing Charge.

Standing Charges – the cost you pay your energy supplier for access to gas and electricity – have increased significantly over the past few years. In response, Ofgem has said that by January of next year, all energy suppliers will need to offer low or zero Standing Charge tariffs.

Martin has long called for Standing Charges to be cut, and has expressed concerns that Ofgem's plans won't support those most in need.

Smart meter rollout should get 'ambitious new targets'

The Committee said the rollout of smart meters "has been sluggish, unreliable and has failed to achieve adequate coverage", which has ultimately led to an increase in billing issues. The Committee has recommended that the Government set "ambitious new targets" for smart meter installations by the end of 2025, focusing on "a requirement that smart meters are operational, not simply installed" – something MSE has campaigned for.

While the Government estimates that 10% of smart meters do not work, an MSE survey conducted last year found that nearly 20% of households reported faulty smart meters. Martin told the Committee: "The difference is that the Government counts a smart meter not working if it does not feed back bills to the company, but we count a smart meter as not working if the customer says, 'my smart meter doesn't work'."

The Government is currently behind on its pledge to fit 74.5% of homes across the UK with smart meters by the end of this year.

Other recommendations raised in the report

The Committee has also raised recommendations on the Warm Home Discount, social tariffs, Cold Weather Payments and more. It said:

• The £150 Warm Home Discount should rise to reflect increases in household energy bills, while eligibility for the scheme should be expanded. All households in fuel poverty and those meeting vulnerability criteria, such as disabilities or long-term health conditions, should be included. From next winter, the discount should be allotted using a tiered system "so that funding is allocated based on household need and energy usage".

• The Government should launch a consultation on a social tariff by January 2026, to be introduced next winter. This "greater, targeted bill" would provide more energy support for low-income and vulnerable people. MSE has also previously called for the introduction of an energy social tariff.

• Better data sharing is needed to "improve the delivery of support schemes, enable the introduction of a social tariff and tackle fuel poverty". The Committee has recommended that the Government establish an 'Energy Data Sharing Taskforce' between governmental departments, energy suppliers, the NHS and local authorities before next winter.

• The Government should consider making a £10 payment to eligible households each day the average temperature is forecast at zero degrees or below. Currently, £25 is given for each seven-day period of freezing weather under the Cold Weather Payments scheme. The Committee added that the requirements for receiving these payments should be lowered, as they do not "reflect the impact that extreme cold can have on vulnerable households".

• Ofgem should launch an 'Energy Debt Relief Scheme', funded by energy suppliers' profits, with "broad eligibility" and automatic support. The regulator should then consult on a more permanent scheme "to provide consumers with lasting protection against debt, including provisions for debt forgiveness".