Chancellor John Healey is looking into removing standing charges on gas bills to help lower household energy costs. Prime Minister Andy Burnham announced this on Wednesday. Standing charges average around 30p per day, adding up to about £108 a year for UK households. Burnham has asked Healey and Energy Secretary Miatta Fahnbulleh to check if these charges can be eliminated and to report back quickly.
Key Details
This announcement comes after the government approved the Jackdaw gas field. This field is expected to start supplying gas to British homes and businesses soon. Burnham defended this decision, saying it would help fund renewable energy projects and lower energy bills by separating gas and electricity prices. He stressed the need for a practical approach to energy security, especially with criticism from Conservative leader Kemi Badenoch about the government's choices.
The Jackdaw project faced delays under the previous government. It is expected to provide up to 6% of the UK’s gas supply. The government also announced a new Energy Wealth Fund to reinvest £2 billion from oil and gas revenue into renewable energy projects. However, environmental groups criticized the approval of Jackdaw, urging a stronger commitment to sustainable energy practices.
Background
Market analysts report that the average dual energy bill for a typical household is now £1,723 per year. With the price cap likely to increase by 16% in January 2027, households could see an extra £276 in costs, according to Cornwall Insight. The government recently removed VAT from electricity bills, which should save households £45 each year.
Related coverage: Chancellor Healey’s Budget Faces Inflation-Driven Pressures.
The possible removal of standing charges could lower energy costs for households, affecting consumer spending and inflation rates. Energy stocks may respond to changes in government policy, especially those involved in gas supply and renewable energy. Keep an eye on the Chancellor's upcoming budget announcement, which is expected to provide more details on energy policies and investments.
Based on reporting by: cityam.com, standard.co.uk