Standing charges to be scrapped from gas bills next year – Treasury

Standing charges on gas bills will be scrapped from next year for around 23 million homes, the Treasury has announced.

The 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 household.

The Treasury said Chancellor John Healey will today ask regulator Ofgem to remove standing charges “in 2027 or as soon as possible after”.

Mr Healey will deliver his first Budget in the Commons on Wednesday afternoon and said the change will give families “breathing space” and make the energy system fairer.

Instead, fixed costs will be paid on the unit rate, which the Treasury said could save 60% of households an average of £45 on their annual bills.

Prime Minister Andy Burnham said: “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.”

Mr Healey added: “Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space.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.”