Lede
John Healey will ask Ofgem to end standing charges on gas bills for 23 million homes, aiming to save two-thirds of households an average of £45 a year.
The chancellor announced the move ahead of his first budget statement in the Commons, saying the fixed daily fee is unfair and outdated. The change would take effect next year or as soon as possible after.
Key Facts
- John Healey will end standing charges on gas bills for 23 million homes.
- He plans to ask Ofgem to remove the charges in 2027 or soon after.
- The move is expected to save two-thirds of households an average of £45 a year.
- Healey called the fixed daily fee ‘unfair and outdated’.
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What happens next?
Before his first budget statement in the Commons, John Healey confirmed he would ask Ofgem, the energy regulator for Great Britain, to end the standing charges on gas bills. The chancellor said the fixed daily fee is ‘unfair and outdated’ and needs to be scrapped next year or as soon as possible after.
The plan affects 23 million homes and is expected to save two-thirds of households an average of £45 a year. Healey stressed that removing standing charges on gas bills would make energy pricing fairer for consumers across the country.
Ofgem now faces the task of implementing the change. Analysts note that scrapping the fixed fee may shift how energy costs are recovered, potentially affecting tariff structures for suppliers and customers.
Who is affected?
The policy targets 23 million homes, covering the majority of households in Great Britain. Two-thirds of these households are expected to benefit directly from an average annual saving of £45 once standing charges on gas bills are removed.
Consumer advocates have welcomed the plan, arguing it addresses long-standing concerns about fairness in energy billing. However, some experts warn that eliminating the fixed daily fee could lead to higher variable rates to compensate for lost revenue.
Businesses in the energy sector are likely to adjust their pricing models. Suppliers may pass on new costs through per-unit charges, meaning actual savings for households will depend on how tariffs are redesigned following the change.
What We Know — and What We Don’t
Verified by the source:
- John Healey will ask Ofgem to end standing charges on gas bills for 23 million homes.
- He described the fixed daily fee as ‘unfair and outdated’.
- The change is expected to affect 23 million homes and save two-thirds £45 annually.
- Ofgem is the energy regulator responsible for implementation.
Still unconfirmed:
- The exact date when standing charges on gas bills will end.
- Whether suppliers will raise unit prices to offset lost revenue.
- How the move will impact low-income or prepayment meter customers.
- The total cost to the energy sector and taxpayers.
Why It Matters
Standing charges on gas bills have been a source of frustration for years. By directing Ofgem to remove them, John Healey is attempting to address affordability concerns for millions of households, as energy costs remain a key issue for voters.
What To Watch
All eyes will be on Ofgem as it determines how to implement the change. Details on new tariff structures and whether savings reach households as expected remain to be seen.