Burnham proposes plan to cut standing charges from gas bills
Summary
Prime Minister Andy Burnham has asked government ministers to create a plan to remove fixed daily fees, known as standing charges, from gas bills. These charges apply regardless of how much gas a household uses and vary by region. The goal is to reduce energy costs, especially for people on low incomes, while exploring how the costs could be moved elsewhere on bills.Key Facts
- Standing charges are daily fixed fees on gas bills that cover connection and infrastructure costs, paid even if no gas is used.
- Burnham asked Chancellor John Healey and Energy Secretary Miatta Fahnbulleh to report back on removing these charges.
- Energy UK said any impact on bills depends on where the costs are moved if standing charges are removed.
- Research group Nesta suggests moving standing charges to the unit rate, meaning people pay more when they use more gas.
- Low gas users might benefit, but heavy users could pay more under such a system.
- Ofgem, the energy regulator, has been consulting on standing charges and is running pilot schemes but has not made final changes.
- Average standing charges are about 30p per day for gas and 55p per day for electricity.
- Removing gas standing charges is seen as a way to help low-income households with rising energy bills, while the government also plans to invest in renewables to lower long-term costs.
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