United Kingdom • • • 🌿 Progressive

Cocina británica cálida con una estufa de gas encendida y una factura sobre la mesa de madera
Una cocina británica con la estufa de gas encendida y una factura sobre la mesa, en referencia a la eliminación de los cargos fijos del gas anunciada por el Gobierno. · Imagen generada — Erick Prometeo Media

United Kingdom scraps gas standing charges to ease household bills

The British Government will abolish standing charges on gas bills, worth £108 a year for the typical household, and move those fixed costs onto the unit rate.

--- The context --- For years, British households have paid a daily charge simply for being connected to the gas supply, whether they used any gas or not. The Government itself describes the market behind that charge as broken, with costs piled onto bills and families left exposed in an uncertain world, after more than four decades of wrong turns in national energy policy. --- The facts --- The Chancellor will announce today an end to standing charges on gas bills and will ask the regulator Ofgem to deliver their removal in 2027 or as soon as possible after that date. A standing charge is a fixed daily fee added on top of a household bill regardless of how much gas has been used, so a household could use no gas at all and still have to pay it. For the typical household, the charge amounts to £108 a year on average. Instead, those fixed costs will be paid through the unit rate, so what each household pays follows what it actually uses. The Government says the change could save 60% of account-holding households an average of around £45 a year, while households without an automatic saving will still gain better control over their bills, without the worry of affording the standing charge. Targeted mitigation for a small number of households will be set out in due course. --- The positions --- Prime Minister Andy Burnham argued that abolishing the charges is about basic fairness and giving people more control over their bills, and said he is determined to reform the broken market so it serves the public interest. Chancellor John Healey described the charges as unfair and outdated and said his Budget will draw a line under an energy policy that has failed billpayers for years. Energy Secretary Miatta Fahnbulleh said too many families face unfair charges and that tackling affordability is her main priority. Greg Jackson, founder and chief executive of Octopus Energy Group, welcomed the move as joined-up thinking toward a fairer and more efficient system. --- What remains unknown --- The details of the promised mitigation for households that gain no automatic saving are still unknown, as is the exact timetable Ofgem will set for removing the charges within the announced window. --- Unanswered questions --- Will the removal actually arrive in 2027 or slip beyond that date? What support will households receive if they see no automatic saving on their bills? How will the fixed costs moved onto the unit rate be shared across different patterns of gas use? --- EPM analysis --- The decision follows the cut in value added tax on electricity bills that took effect at the beginning of this month and already left the October price cap £45 a year lower than it would otherwise have been. Alongside that relief, the Government announced last week a fund to support investment in cheap and clean power, as part of a longer-term fix for the energy problems of Britain. 📌 EPM Take: In EPM's view, ending a charge that families paid even when they used no gas corrects a clear unfairness and gives households real control over part of their bill, with an estimated saving of £45 a year for most account-holding households. The full value of the reform will depend on removal arriving in 2027, on the shift of costs onto the unit rate being transparent, and on the promised mitigation genuinely protecting the households that do not save automatically under the new arrangement being introduced.
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