UK Chancellor proposes ending gas standing charges for 23 million homes
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The Treasury plans to ask energy regulator Ofgem to abolish fixed daily fees on gas bills, which could save most households about £45 annually.
The UK Treasury announced that Chancellor John Healey will request Ofgem to remove the standing charge – a fixed daily fee of roughly £108 per year – from gas bills for around 23 million households. The change is slated for implementation in 2027 or shortly thereafter and is expected to reduce annual gas costs for two-thirds of account-holding households by an average of £45.
"Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space," Healey said.
The move follows recent government actions, including a reduction in VAT on electricity bills that lowered the energy price cap by £45 per year. Energy Secretary Miatta Fahnbulleh said she will continue efforts to protect consumers from unaffordable bills.
Industry leaders welcomed the proposal. Greg Jackson, founder and chief executive of Octopus Energy Group, described it as "real joined-up thinking" that could lead to lower gas bills and greater savings for customers who switch to heat pumps.
Labour Mayor Andy Burnham called the abolition of standing charges a matter of fairness and greater consumer control over energy costs.