UK Scraps Gas Standing Charges for 23 Million Homes
Chancellor John Healey is abolishing gas standing charges to save millions of households money ahead of his first Budget statement.
Chancellor of the Exchequer John Healey announced the abolition of standing charges on gas bills for approximately 23 million homes, describing the fixed daily fees as an unfair and outdated practice. The move, which will be formally confirmed in his first Budget on Wednesday, requires the energy regulator Ofgem to remove the charges in 2027 or as soon as possible. The Treasury estimates that 60% of households will save an average of £45 annually, shifting fixed costs to the unit rate.
These reforms coincide with a plan to move green levies from energy bills to general taxation. The government has also temporarily removed 5% VAT from electricity bills until March 31 next year to provide immediate relief, as Cornwall Insight forecasts a 16% rise in the Ofgem energy price cap starting January 1.
Prime Minister Andy Burnham stated the changes are intended to reform a broken energy market and ensure basic fairness. In a broader energy strategy, the government has approved the Jackdaw gasfield in the North Sea and established a new energy wealth fund to support clean power investment. Energy Secretary Miatta Fahnbulleh pledged to continue protecting citizens from unaffordable bills.
