Chancellor to scrap gas standing charges from 2027

Summarised from 8 outlets · 9 reports · Updated 28 Oct, 08:03 · Archive

Chancellor John Healey will ask energy regulator Ofgem to remove standing charges from gas bills from 2027 or as soon as possible after.

Chancellor John Healey has announced that standing charges on gas bills will be removed from 2027 or as soon as possible after. The move affects around 23 million homes currently paying the fixed daily fee, which averages £108 a year regardless of how much gas a household uses.

Standing charges are fees added to gas bills to cover the cost of connecting homes to energy supply networks. Households must pay them even if they use minimal gas. Healey will ask Ofgem, the energy regulator for Great Britain, to implement the change.

Under the new system, the cost of standing charges will be incorporated into the unit rate that households pay for gas. The Treasury estimates this could save 60 per cent of account-holding households an average of £45 per year on their bills.

Healey said the charges were 'unfair and outdated'. He stated: 'Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space.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.'

Prime Minister Andy Burnham echoed this message, saying: 'Abolishing gas standing charges is about basic fairness and giving people more control over their bills. I am determined to reform our broken energy market, so it better serves the public interest.' Burnham had asked the Treasury and energy secretary Miatta Fahnbulleh to examine the issue a week earlier.

The government acknowledged potential concerns about vulnerable households, particularly those who use high volumes of gas. The Treasury said it will set out 'targeted mitigation for a small number of households' to ensure those who might not automatically benefit from the change are not left worse off.

The announcement came hours before Healey's first Budget statement to Parliament on Wednesday afternoon, as part of his effort to provide households with 'breathing space' amid cost-of-living pressures.

How it is being reported

• What the changes to gas bills mean for youThe chancellor announced that standing charges are to be scrapped from household gas bills hours ahead of the Budget.BBC Politics · 28 Oct, 07:59
• Standing charges to be scrapped from gas bills next year – TreasuryThe charges are a fixed daily fee added to bills.Evening Standard · 28 Oct, 07:46
• Healey scraps ‘unfair’ standing charges from gas billsJohn Healey has said he will scrap “outdated and unfair” standing charges from gas bills, in a move which could save households £45 per year. The Chancellor said these fees – which are charged on top of the daily rate to cover the cost of connecting to a supply – are part of “an energy [...]City AM · 28 Oct, 07:45
• John Healey To Scrap Standing Charges On Gas Bills In His First BudgetChancellor 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…HuffPost UK · 28 Oct, 07:34
• John Healey to end standing charges on gas bills for 23m homesAs budget looms, chancellor says he will ask Ofgem to remove ‘unfair and outdated’ fixed daily fee in 2027 or soon after Business live – latest updates John Healey is abolishing standing charges on gas bills for 23m homes to end an “unfair and outdated” practice, saving households an average of £45 a year. Ahead of his first budget statement in the Commons later on Wednesday, the chancellor said he would ask Ofgem, the energy regulator for Great Britain, to remove these charges – which are £108 a year for the typical household – next year or as soon as possible after. Continue reading...Guardian Business · 28 Oct, 07:32
• Standing charges on gas bills to be scrapped from 2027, Chancellor confirmsThe charges are a fixed daily fee added to bills, regardless of how much gas a customer uses, and cost around £108 per year for a typical householdThe i Paper · 28 Oct, 07:26
• Chancellor John Healey to end standing charges on household gas bills, as City expects a quiet budget – business liveRolling coverage of the latest economic and financial news John Healey has pledged to provide households with “breathing space” from the rising cost of living pressures. And the Treasury has just announced a new measure to help – the government is removing standing charges from household gas bills in the UK. “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…Guardian Business · 28 Oct, 07:12
• Gas bill standing charges to be scrapped for millions, Treasury says ahead of BudgetStanding charges on gas bills, which cover the cost of delivery to homes and businesses, will be scrapped from 2027 “or as soon as possible after”, the Treasury said.The Independent · 28 Oct, 07:02
• BREAKING: Budget to remove 'unfair' £108-a-year standing charges on gas billsChancellor John Healey will announce the removal of standing charges from gas bills in today's Budget - saving British families more than £100 a yearThe Mirror · 28 Oct, 06:59

In this story: John Healey · Andy Burnham · Ofgem · Miatta Fahnbulleh · Great Britain

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