Prime Minister Andy Burnham has announced that he has asked Chancellor John Healey to look at removing standing charges from gas bills. The fixed daily fee, which is added to energy bills regardless of usage, currently costs UK households over £100 a year. The announcement was made at Prime Minister's Question Time on Wednesday, October 21.
Speaking in Parliament, Mr Burnham said: "I can tell the House today that I have asked the Chancellor and the Energy Secretary (Miatta Fahnbulleh) to look at whether we can remove standing charges from gas bills and to report back to this House at the earliest opportunity."
Jackdaw gas field approved
The announcement came as the Government confirmed it had approved the Jackdaw gas field, which will begin supplying gas to homes and businesses from the end of the month. Energy Secretary Miatta Fahnbulleh said the decision followed careful consideration of all relevant factors.
"Following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers," she said.
"This decision will support the country's energy security with homegrown gas this winter and help minimise the UK's use of imported higher emission fuels as we continue our transition to renewables and nuclear. The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licences for oil and gas and achieving net zero by 2050."
Criticism from opposition
The decision followed a long delay due to a legal challenge, with opponents arguing the scheme should not go ahead due to its environmental impact. Mr Burnham said the previous Tory government had "messed up" the process, leading to the delay.
"That's why there was the delay, because they didn't do the process properly. And we've made a pragmatic decision, Mr Speaker, that will allow us to do two things," he said. "Firstly, build a bridge to a renewable future because the resources that come in now from this decision will allow us to invest in renewables, bring forward clean energy and in this Parliament, substantially delink gas and electricity prices so that we can bring bills down."
Mrs Badenoch criticised the Labour Government for "dithering" for two-and-a-half years to approve Jackdaw, calling for Labour to repeal its ban on all new oil and gas licences. "We have the resources, the expertise and the people," she said. "What we have lost is the confidence to make tough decisions."
Martin Lewis on standing charges
Martin Lewis has long been a critic of standing charges, comparing them to a charge for entering a shop even if you buy nothing. On his MoneySavingExpert website, he said: "The current Standing Charge is a moral hazard that disincentivises lower usage and keeps bills high for people who use very little energy. It's the biggest single cause of complaint I get about energy bills, by a mile."
"Paying £300+ a year simply for the facility of having energy is too much. It also penalises older people who don't use gas in the summer yet still pay for it every day. I've pushed on this for years, and it's good to finally see some (albeit small) movement."
The current daily standing charge for gas is 29.68 pence, according to Ofgem, which adds up to £108.33 a year.
