UK Chancellor John Healey to Scrap Gas Standing Charges in Bid to Ease Household Bills

London – British Chancellor of the Exchequer John Healey announced on Wednesday that fixed standing charges on household gas bills will be abolished, a measure the government says will provide relief to millions of families ahead of his first Budget.

Under the plan, Healey will ask energy regulator Ofgem to remove gas standing charges for around 23 million homes in 2027 or as soon as possible thereafter. The fixed daily fee, which currently costs a typical household about £108 a year, will instead be incorporated into the unit rate customers pay for the gas they actually use.

“Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space,” Healey said in a statement issued by the Treasury.

Standing charges cover the cost of connecting a home to the gas network, along with a share of supplier operating costs and certain government social schemes. Households must pay them regardless of how much energy they consume, a feature that has long drawn criticism for penalising low users. According to Treasury estimates, around 60 percent of account-holding households stand to save an average of £45 a year on their gas bills as a result of the change.

Because shifting the charge to the unit rate will raise costs for some higher-consumption households, the Treasury said ministers would set out targeted measures in due course to support a small number of households who could be adversely affected. Ofgem has previously noted concerns that reforms of this kind could affect vulnerable groups, such as disabled consumers with high and inflexible energy needs.

Prime Minister Andy Burnham had told the House of Commons last week that he had asked Healey and Energy Secretary Miatta Fahnbulleh to examine the abolition of standing charges. Burnham described the decision as a matter of basic fairness.

The move was welcomed by consumer campaigner Martin Lewis, founder of MoneySavingExpert, who has repeatedly criticised standing charges and who was at 11 Downing Street on the morning of the Budget. Lewis said he was pleased with the announcement and that Healey had told him the government would also seek to remove standing charges from electricity bills.

The announcement comes as British households continue to face pressure from high energy costs, with the energy price cap forecast to rise in the months ahead.