John Healey To Scrap Standing Charges On Gas Bills In His First Budget
The government estimates this will save 60% of households an average of £45 a year.
- •The UK government plans to eliminate standing charges on gas bills, saving households an average of £45 annually.
- •The Treasury estimates that 60% of households will benefit from this change, with the cost being absorbed into the unit rate of energy.
- •Energy Secretary Miatta Fahnbulleh prioritizes tackling affordability, with the goal of protecting people from unaffordable energy bills.
Chancellor John Healey has announced he will remove standing charges on gas bills in his first Budget later today.
This is effectively a fixed daily fee – which averages to around 29p a day or £108 a year – which goes to energy suppliers for connecting each household to their networks.
Households have to pay it even if they managed to get their overall gas usage down to zero.
The Treasury claims removing this fee will save 60% of households an average of £45 a year.
Money Saving Expert Martin Lewis has regularly criticised the standing charges, calling them an "energy poll tax".
The chancellor said: "Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space.
"My Budget will draw a line in the sand on an energy policy that has failed British billpayers for years, letting extra costs on bills pile high and leaving households even more exposed to global shocks."
Healey will ask energy regulator Ofgem to end this "unfair and outdated practice" in 2027 – or as soon as possible afterwards – and move the cost of standing charges into the unit rate of energy.
Andy Burnham announced a review on this just a week ago in the Commons after he gave Jackdaw gas field the green light.
Speaking during prime minister's questions, Burnham said extracting gas from Jackdaw would "substantially delink gas and electricity prices so that we can bring bills down".
Energy secretary Miatta Fahnbulleh said: "Too many families face unfair charges, so we're making it easier for people to take control of their energy bills.
"By removing one of the nation's bugbears – taking standing charges off gas bills, with extra support for those who need it – we'll give millions of people breathing space.
"Tackling affordability is my number one priority, and I will keep doing everything I can to protect people from unaffordable bills."
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