Chancellor John Healey will announce the scrapping of standing charges on UK gas bills, worth £108 ($143) annually for the typical family, by 2027 or shortly after. The Labour government is instructing energy regulator Ofgem to remove these flat fees and shift the cost to a per-unit usage model. The change is projected to save 60% of households an average of £45 per year, benefiting lower-income households disproportionately who keep energy usage low.
This follows other Labour measures including removing green levies and cutting VAT on energy bills, which have already reduced average household costs by about £195, according to Bloomberg calculations. Healey stated, "Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space," ahead of his budget speech. Prime Minister Andy Burnham emphasized the move reflects "basic fairness" and pledged to reform the energy market to better serve the public interest as US-Iran tensions drive energy prices higher, with household bills forecast to jump 27% to £2,192 annually from January.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing