Andy Burnham has announced a review into whether standing charges on gas bills could be removed, following the Labour government's approval of drilling in the Jackdaw gas field in the North Sea.
The Prime Minister told the Commons that he had asked the chancellor and the energy secretary to look at removing standing charges from gas bills, and to report back to the House at the earliest opportunity.
What are standing charges?
Most energy bills are broken down by unit rate, which is what a person pays for each unit of gas or electricity used, and a standing charge. The standing charge is a cost paid to energy suppliers for having access to gas and electricity.
Ofgem estimates the average gas daily standing charge for those who pay by direct debit is currently 29.68p, which equates to roughly £108 a year.
Jackdaw approval and criticism
The announcement came hours after the Labour government approved drilling in the Jackdaw gas field, a decision that drew criticism from Kemi Badenoch, who accused Labour of "dithering" over the approval.
In response, Burnham said: "That's why there was the delay, because they didn't do the process properly."
Licences for the fields were granted by the Conservative UK government in 2022 and 2023, which sparked legal challenges from environmental groups. The Court of Session in Edinburgh ruled last year that Rosebank and Jackdaw had been unlawfully approved because the government had failed to take into account the climate impact of burning extracted oil and gas from the sites.
Benefits and reaction
Burnham said the decision to approve Jackdaw would allow the government to "build a bridge to a renewable future" and invest in renewables, as well as "substantially delink gas and electricity prices" to bring bills down.
Analysis carried out by Nesta, a foundation which focuses on cutting household carbon emissions and making clean energy affordable, suggests that the average annual saving for dual fuel households by removing standing charges on gas would be £22.
Money Saving Expert Martin Lewis, who has long campaigned against standing charges, often calling it an "energy poll tax", celebrated the news on social media, stating: "Finally looks like we may be getting somewhere with STANDING CHARGES..."
The announcement comes just a week before the Autumn Budget, the first delivered by Burnham's Labour government.
