UK chancellor announces removal of gas standing charges, saving millions of households
Chancellor John Healey said the government will ask Ofgem to eliminate gas standing charges by 2027, a move expected to cut average household bills by about £45 a year.
The Treasury announced that the government will request Ofgem to abolish fixed gas standing charges, which currently average £108 per household annually. By shifting these costs onto the unit rate, the change is projected to save roughly 60% of account-holding households about £45 each year.
"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," Chancellor John Healey said.
Prime Minister Andy Burnham described the measure as part of a broader effort to reform the energy market.
"We are determined to reform our broken energy market," Burnham said.
The announcement was made ahead of Healey's budget statement at 12:30 pm, followed by a series of parliamentary debates and press briefings. Analysts noted the move as a modest cost-of-living relief rather than a sweeping reform.
Financial sector representatives welcomed the decision to retain the existing cash ISA allowance, reversing a previous proposal to reduce it. Investment firms said the reversal would preserve incentives for long-term savings.
Environmental groups expressed concern that the budget did not go far enough, warning that continued support for new oil projects could undermine climate goals.
Opposition parties criticized the policy as a shift of costs rather than a genuine reduction, labeling it "sleight of hand".
Consumer adviser Martin Lewis, who met Healey before the announcement, said the chancellor hinted at further support for households facing rising energy prices, though no details were confirmed.