Andy Burnham has told MPs he has asked the Chancellor and Energy Secretary to look into whether standing charges can be removed from gas bills, as part of efforts to ease the pressure of rising energy costs on families.
Speaking during Prime Minister's Questions, the Prime Minister vowed to do more to bring down bills amid the continuing impact of the war in Iran and the ongoing crisis in Ukraine. Standing charges are a flat daily fee added to bills even if no energy is used that day.
Mr Burnham told the House: "I can tell the House today that I have asked the Chancellor (John Healey) 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."
Current standing charge levels
Under the current energy price cap, average standing charges by Direct Debit are 54.83p per day for electricity and 29.68p per day for gas. This costs on average around £200 a year for electricity and about £108 a year for gas.
Ofgem says standing charges are "used to recover the costs required to provide energy company services, including providing and maintaining the wires, pipes and cables that deliver power to a customer's door, through to the staff and buildings required for the energy business to function".
Recent bill increases and forecasts
Families across Britain saw their energy bills rise from the start of October after Ofgem's energy price cap went up by 4%. The average yearly gas and electricity bill for a household that pays by direct debit has gone from £1,663 to £1,723, from the start of October to the end of December. The price cap limits what you pay for unit rates of gas and electricity, rather than a total limit on your energy bill.
Experts have warned energy bills could further soar by almost another £300 this winter. Cornwall Insight predicts the price cap could hit £1,999 a year this January - up by 16% or £276.
Budget support and Jackdaw approval
Chancellor John Healey has signalled that Britain's poorest households will get help with the cost of living in next Budgets, with "targeted and temporary" support favoured over a universal offer. He told ITV last week: "Energy costs are punishing at the moment. We will do what we can in the Budget, both for business and for households, to give people a bit of breathing space."
During PMQs, Mr Burnham also defended the Government's decision to approve the controversial Jackdaw gas field in Scotland. He told MPs: "This decision does strengthen our energy security. It will release gas into British homes and British industries starting in the next few weeks, and it does support us in a difficult time."
The decision has however triggered a fierce backlash from green campaigners, while the End Fuel Poverty Coalition said it won't cut bills. "The approval of Jackdaw will boost Shell's profits while doing nothing to lower bills," Simon Francis, the coalition's co-ordinator, said.
In an interview with The Mirror in August, Mr Burnham suggested he was looking at addressing standing charges. He said: "We'll keep monitoring that situation and make sure we're doing everything that we can do. People have raised issues like the standing charges on bills, and they kind of pushed me to go further on that. So I'll take a look at that issue, alongside other issues and other things that we might be able to do to help people with the cost of living. It remains a very tough time for people, and I know the main thing people would like me to do if I can do it is to ease that pressure a little bit."
