Chancellor John Healey plans to abolish gas standing charges to reduce household energy costs

LONDON — Chancellor John Healey is moving to abolish standing charges on gas bills for 23 million homes across Great Britain, a policy change intended to ease household energy costs ahead of his budget statement.

Under the planned reform, the chancellor will ask energy regulator Ofgem to remove the fixed daily fees next year or as soon as possible thereafter. Standing charges are a compulsory fee added to household gas bills regardless of how much fuel is consumed, costing typical households £108 a year. According to the Treasury, removing the charges could save 60% of account-holding households an average of £45 off their annual bills, while benefiting roughly two-thirds of homes overall.

Ahead of delivering his first budget statement in the Commons on Wednesday, Healey said that gas standing charges are unfair and outdated, adding that he is scrapping them to give millions of households breathing space.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 said.

The policy announcement builds on prior government measures aimed at curbing consumer energy expenses, including a value-added tax cut on electricity bills that came into effect at the beginning of the month. Alongside these household relief measures, the administration has also approved the Jackdaw gasfield in the North Sea and established a new energy wealth fund.

The planned removal of the daily fees has drawn support from regional figures and industry executives. Andy Burnham stated that abolishing gas standing charges addresses basic fairness and gives people greater control over their expenses. Greg Jackson, founder and chief executive of Octopus Energy Group, also welcomed the initiative, describing it as a move toward a more efficient energy system that delivers lower standing charges and improves the price ratio between electricity and gas.