Healey asks Ofgem to scrap gas standing fees for 23 million homes
John Healey says he will ask Great Britain’s energy regulator, Ofgem, to abolish gas standing charges for 23 million homes in 2027 or as soon as possible afterwards. The fixed daily fee applies regardless of how much gas a household uses; the government says removing it would make bills fairer and reduce costs for many households.
Standing charges currently cost a typical household £108 a year, while the Treasury estimates that 60% of account-holding households would save an average of £45 annually. The proposal follows a recent VAT cut on electricity bills, which lowered the energy price cap by £45 a year from October. The government has also approved the Jackdaw North Sea gasfield and announced an energy wealth fund for investment in cleaner power.
In short
- Healey plans to ask Ofgem to abolish gas standing charges.
- The change could affect 23 million homes.
- Around 60% of account holders may save £45 a year.
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The case for
A fixed daily charge makes households pay for gas even when they use very little, so abolishing it could make bills fairer for people who conserve energy, live alone or struggle to afford heating. The Treasury estimates that 60% of account-holding households would save an average of £45 a year, and removing the fee could make it easier for households to cut costs by reducing consumption.
The case against
Standing charges help cover the costs of maintaining meters, pipes and the wider network, which do not disappear when a household uses less gas. If those costs are recovered through higher unit rates or other charges, households with greater gas use could pay more, while removing the fixed fee could make bills less predictable and weaken the contribution of low-use customers to shared infrastructure costs.
Explained simply
Gas standing charges are fixed daily fees on a household’s bill, paid whether or not the household uses any gas. They help cover costs such as maintaining the network and supplying an account.
Ofgem regulates energy suppliers and sets the price cap, which limits what suppliers can charge for each unit of energy and for standing charges. The government can ask Ofgem to change how charges work, but the regulator is responsible for deciding how rules are applied.
Removing the fee could lower bills for some households, while changing how network costs are recovered could affect what customers pay in other ways. The proposal is part of wider debate about household energy costs and how Britain should pay for its energy system.
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Originally published by The Guardian as “John Healey to end standing charges on gas bills for 23m homes”.