Chancellor preparing to scrap gas standing charges, reports say

Chancellor Healey was preparing to announce plans to scrap standing charges on household gas bills, the Telegraph reported on 27 October. The planned reduction to household gas bills was reported as £50.

Standing charges are fixed daily fees on gas bills. On 21 October, the BBC reported that Prime Minister Andy Burnham had asked ministers to develop a plan to remove standing charges from gas bills.

Standing charges have changed before. In February, the energy regulator, Ofgem, confirmed the energy price cap would fall by 7% from 1 April. The government said the fall was driven by action to remove an average of £150 of costs from energy bills. The BBC reported that a 17% reduction in the gas standing charge resulted from moving some costs onto the unit rate, the charge for each unit of energy used.

Electricity has also seen a tax change. In July, the government cut value added tax (VAT) on household electricity bills from 5% to 0%. The government said the change was estimated to reduce CPI inflation, the Consumer Prices Index, by around 0.10 percentage points. Reuters reported that the cut was set to take effect from 1 October and was expected to reduce bills by around £45.

Separately, Ofgem said in 2025 that every energy supplier would be required to offer energy tariffs with low or no standing charges.