Energy bosses have given a cool reception to regulator Ofgem’s plan to overhaul standing charges.

Under Ofgem’s plans announced in September, all suppliers in England, Scotland and Wales will offer at least one tariff in which standing charges are lower but customers then pay more for each unit of energy used.

But appearing before a committee of MPs, the chief executives and senior management of the UK’s biggest suppliers questioned the outcome of such a move.

Some called for the abolition of standing charges, while others say the proposals would make the issue worse for customers.

Rachel Fletcher, director of regulation and economics at the UK’s largest supplier Octopus Energy, said: “I think a lot of the concern about standing charges is just that people can’t afford to pay their bill.

“Where Ofgem is going is not going to solve any problems, it could make things worse.”

The bosses, giving evidence to the Energy Security and Net Zero Committee, pointed out that the major problem for some customers is that the cost of energy was unaffordable, and some could make the wrong choice when choosing tariffs with low standing charges.

Many called for a social tariff, in which those who are on low incomes receive a discount which is likely to be paid for by other billpayers.

Energy UK, which represents suppliers, recently called for “enduring” government support for those struggling to pay their bills.

Ministers have pointed to the extension of the Warm Home Discount to those on benefits, which knocks £150 off winter bills for one in five households. It is funded by a rise for all billpayers.

Ofgem’s price cap, which sets a maximum price per unit of energy for millions of people in England, Scotland and Wales who are on variable tariffs, rose by 2% in October.

The amount owed to energy suppliers by customers has already increased to a new record high of £4.4bn.

The data, which covers the period from April to June, shows that more than one million households have no arrangement to repay their debt, also a record high.

At the hearing, Simone Rossi, chief executive of EDF UK, was among the bosses who told MPs asking about the climate challenge that the price of electricity compared with a gas was a disincentive to customers wanting to go electric. It was also expensive in the UK compared with other countries.

On Tuesday, Energy Secretary Ed Miliband told the BBC shifting green levies from electricity bills to gas was one option being considered to lower energy costs for households.

But Miliband said no decisions had been made and insisted he would not change energy policy costs “in a way that damages the finances of ordinary people”.

While rebalancing energy policy costs could lower electricity bills, it could increase them for householders using gas boilers.

When asked if the rebalancing of energy bills was being reviewed by the UK government, Miliband said: “We’ve always said we will look at ways of lowering bills for people and that’s obviously one of the options.

“I just want to say on that, we will only ever do that in a way that’s fair and genuinely reduces bills for people.”

Policy costs are effectively government taxes used to fund environmental and social schemes, such as subsidies for renewables.

These costs made up about 16% of an electricity bill and 6% of a gas bill last year, according to research by the charity Nesta.

The Climate Change Committee has long recommended removing policy costs from electricity bills to help people feel the benefits of net-zero transition.

The government’s climate adviser said the move would make switching to electric technologies, such as heat pumps, cheaper and encourage take-up.

One option – backed by Energy UK – is shifting policy costs from electricity bills to gas.

Energy UK analysis shows that over 15 years, households using an air source heat pump, which is an electrically powered system, could save up to £7,000, compared to those with gas boilers, if energy bills were fully rebalanced.

But such a move would result in an increase in bills for households that use gas for heating.

When asked if that was one option the government was considering, Miliband said: “I’m not going to get into any of the detail of this.

“All I am saying is I’ve always said I’m cautious about this issue because fairness is my watchword.

“So if we can do it in a way that’s fair, that’s obviously something we’re seriously looking at.

“But no decisions have been made on that. I’m not going to do it in a way that damages the finances of ordinary people.”

At the committee, Chris O’Shea, chief executive of Centrica, said this would be a subsidy from the poor to the rich.

Rachel Reeves has said she is looking at “further measures on tax” ahead of next month’s Budget, in the clearest sign yet that tax hikes are on the way.

The chancellor also said she was considering further measures on public spending, in a bid to put the UK’s finances on a firmer footing.

Speaking to broadcasters ahead of an international finance summit in the US, she added that she would “continue to prioritise economic and fiscal stability”.

The chancellor is widely expected to raise taxes at the Budget on 26 November, after gloomy economic forecasts and a series of U-turns on welfare cuts made it harder for her to meet her own tax and spending rules.

Reeves announced tax rises worth £40bn a year at her first Budget last November, including hikes to payroll taxes paid by employers, and insisted she would not have to repeat the move in subsequent years.

But the chancellor is now facing the prospect of another repair job to the public finances, after rises to borrowing costs since then and expected downgrades to the productivity of the UK economy.

Some analysts have estimated Reeves will have to raise taxes or cut spending by around £20bn to meet her “non negotiable” financial rules.

These rules mean her plans must be projected to get government debt falling as a share of national income by 2029-30, and day-to-day government costs must be paid for by tax income rather than borrowing.

Speaking to broadcasters in Washington DC ahead of the the International Monetary Fund (IMF) annual meeting, the chancellor said: “I’ve always been very clear that we will continue to prioritise economic and fiscal stability in the UK.”

Asked whether she would have to raise taxes, she replied: “As we get the forecast, and as we develop our plans, of course we are looking at further measures on tax and spending, to make sure that the public finances always add up.”

In an earlier interview with Sky News, Reeves said austerity policies and former Prime Minister Liz Truss’s mini-budget had damaged the UK economy.

She also sought to blame Brexit, adding that the economic effects of the UK’s exit from the EU had been “severe and long-lasting”.

She cited the government’s attempts to strike food regulation and youth visa deals with the EU as moves that were “undoing some of that damage”.

Reeves and her Treasury ministers have so far been tight-lipped on which taxes could potentially go up.

The chancellor has not ruled out continuing to freeze income tax thresholds beyond the 2028 date fixed by the last government, allowing more people to be dragged into higher bands as their wages rise over time.

Reports have also suggested she is looking at property taxes, including making more landlords pay National Insurance on rental income.

There has also been speculation that betting companies could face higher taxes, with the chancellor recently saying she thought “there is a case for gambling firms paying more”.

In her speech to Labour conference last month, Reeves pledged to keep “taxes, inflation and interest rates as low as possible” – but has reduced her options by promising at the last election not to hike the biggest revenue-raising taxes.

Labour promised in its 2024 manifesto not to raise income tax rates, VAT, a sales tax, and corporation tax, which is paid by companies on their profits.

The party also promised not to raise National Insurance – prompting a row last autumn when it announced the rise in the contributions paid by employers.

Reeves had been widely expected to hike taxes at the Budget, but her comments in Washington were also notable for explicitly raising the prospect that tax rises could be accompanied by cuts to public spending.

However, many Labour MPs believe that spending cuts in most areas would be politically unviable after the failed attempts at welfare cuts earlier this year, with a welfare overhaul put on ice pending a ministerial review.

The day-to-day budgets of government departments were only recently set for the next three years at June’s spending review, although the government could promise to cut spending in four or five years.

The Conservatives opened up a clear dividing line on the issue at their conference last week, pledging to slash public spending by £47bn a year if they win the next election through cuts to welfare, the civil service and foreign aid.

On Monday, the International Monetary Fund (IMF) said the UK was set to be the second-fastest-growing of the world’s most advanced economies this year.

But the IMF also predicted the UK will face the highest rate of inflation among G7 nations both this year and next, driven by rising energy and utility bills.

Shadow chancellor Sir Mel Stride said the government needed to get a grip on public spending, rather than raise taxes again.

He said: “Be in no doubt, this tax doom loop is down to the Chancellor’s economic mismanagement.

“Under Rachel Reeves we have seen inflation double, debt balloon, borrowing costs at a 27-year high, and taxes up – with more pain on the way in the autumn.”