The Treasury has announced that standing charges on gas bills will be scrapped from next year for around 23 million homes, as the Government reveals its first Autumn budget since Andy Burnham became Prime Minister.
Chancellor John Healey has promised to use his first Budget to move to cut energy bills "for good" as the Government seeks to ease surging costs for households and businesses.
The standing charges on gas bills are a fixed daily fee added to bills, regardless of how much gas a customer uses, and cost around £108 per year for a typical household, reports the Press Association.
Ofgem to Remove Charges
The Treasury said Chancellor John Healey will ask regulator Ofgem to remove the charges "in 2027 or as soon as possible after".
Mr Healey will deliver his first Budget in the Commons on Wednesday afternoon (October 28) and said the change will give families "breathing space" and make the energy system fairer.
Instead, fixed costs will be paid on the unit rate, which the Treasury said could save 60% of households an average of £45 on their annual bills.
Government Reaction
Prime Minister Andy Burnham said: "Abolishing gas standing charges is about basic fairness and giving people more control over their bills."
"I am determined to reform our broken energy market, so it better serves the public interest."
Mr Healey added: "Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space."
"My Budget will draw a line in the sand on an energy policy that has failed British billpayers for years, letting extra costs on bills pile high and leaving households even more exposed to global shocks."
