The Chancellor is investigating removing standing charges from gas bills in a move that could save households around £108 a year. Prime Minister Andy Burnham said he had asked John Healey to look at eliminating the fee, which is charged at an average of 29.68p per day, as he defended the decision to approve the Jackdaw gas field.
Prime Minister's Questions exchange
Responding to Conservative leader Kemi Badenoch at Prime Minister's Questions, Mr Burnham said he had made a decision on the controversial North Sea gas field that the previous Tory government had "messed up".
Ms Badenoch had criticised the Labour Government for "dithering" for two-and-a-half years to approve Jackdaw, as she called for Labour to repeal its ban on all new oil and gas licences.
"There was the delay, because they didn't do the process properly," Mr Burnham told MPs. "And we've made a pragmatic decision that will allow us to do two things.
"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.
"It will also allow us to do more to help people with bills. 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."
Energy security debate
Ms Badenoch accused the Government of not wanting to make "tough decisions" to secure Britain's energy security. "We have the resources, the expertise and the people," she said. "What we have lost is the confidence to make tough decisions".
Mr Burnham faced a backlash from environmental campaigners on Wednesday after the UK Government approved plans to begin drilling in the Jackdaw gas field in the North Sea.
Energy Secretary Ms Fahnbulleh backed the scheme, which is expected to start supplying gas to British homes and firms within weeks. She is now also under pressure to approve the separate Rosebank oil and gas field as a further sign of commitment to the North Sea and domestic energy production.
Jackdaw approval and reaction
The Government announced a new fund to funnel North Sea tax revenues into green energy schemes but the Prime Minister was condemned by environmental groups for the decision to back Jackdaw.
The approval ends months of speculation about the future of the Jackdaw project, which owner Adura said could deliver around 6% of UK North Sea gas production.
Gas is expected to start flowing by the end of the month after Ms Fahnbulleh agreed that regulator the North Sea Transition Authority could approve the scheme. Ms Fahnbulleh said the move will "support the country's energy security with homegrown gas this winter" although she acknowledged it would not bring down household bills.
But environmental campaigners hit out at Mr Burnham's Government. Ami McCarthy, head of politics for Greenpeace UK, said: "Approving Jackdaw shows the toxic grip fossil fuel lobbyists still hold over our energy policy.
"Andy Burnham promised pragmatism, but there is nothing pragmatic about rubber-stamping a project that won't lower energy bills, won't boost energy security and will create just 27 full-time jobs."
