Government removes standing charges from gas bills
The government will scrap gas standing charges, shifting fixed network and policy costs into unit rates; low-use households could pay less, while high-use households may face higher bills.
AI-assisted synthesis · Based on 3 independent reports from 4 outlets · Article text read from 1 of 3 reportsHow it's made
View timeline · 6 entriesWhat happened
Key facts
- The headline says the government is scrapping standing charges on gas bills.
- The headline asks how the change will affect energy bills but gives no impact figures.
The brief
Healey announced a £100 energy payment for households living in council tax bands A to D, with the money due to go directly into their bank accounts this winter. About 20 million households are expected to receive it, and Healey said the scheme would cost £2.6 billion.
The announcement sets out a direct payment alongside planned changes to household energy charges and tax treatment of electricity bills. Healey said the payment was intended to help households through the coldest months and into spring. The payment is described as a household measure for people in the specified council tax bands; the amount is £100 per household.
The figures for the expected reach and overall cost were given by Healey. On electricity bills, Healey said he would ask Ofgem to remove standing charges in 2027 or as soon as possible afterward. The source also says the VAT cut on electricity bills was extended to July 2027.
These are separate elements of the package: a request to the energy regulator concerning standing charges, and an extension to the VAT measure. Gas standing charges are set to change on a later timetable. The Chancellor said their removal would take place in 2027 at the earliest.
The source gives October 1, 2027, or January 1, 2028, as the dates expected for the change, distinguishing the possible implementation dates from the earliest year the Chancellor named. The account also gives an example of how the changes could affect gas costs.
A household that uses 7,000 kWh of gas per year could be about £40 better off under the changes, according to a comparison website. That estimate is conditional on the stated level of gas use and is not presented as a uniform saving for every household.
The announced payment and the changes to standing charges and VAT have different mechanisms and schedules: the payment is due this winter, while the electricity standing-charge request concerns 2027 and the gas charge change is not expected before 2027.
The details reported by Healey include the payment’s intended reach and total cost, the regulator request, the VAT extension, and an illustrative gas-bill estimate.
Why it matters
- The £100 payment gives eligible households a one-off contribution toward winter bills, helping ease pressure on budgets during the coldest months, though it may cover only part of their energy costs. Removing electricity standing charges would change bills more fundamentally by reducing the fixed amount customers pay even when they use little power, potentially benefiting low-use households; the effect depends on how suppliers adjust other charges and when the change takes effect.
What to watch next
- Whether Healey asks Ofgem to remove electricity standing charges in 2027 or as soon as possible afterward.
- Whether gas standing charges are removed on October 1, 2027, or January 1, 2028.
- The extension of the electricity-bill VAT cut through July 2027.
How it's being covered
Coverage analysisShow details5 source articles · 4 unique outlets · 3 distinct reportsOutlet political mix: Mostly Center· 3 Center · 1 RightWhere the outlets are based: Europe 100%
- Coverage is currently concentrated among Center-rated outlets (3 of 4 rated sources); comparatively few Left-rated outlets have published on the event.
- Coverage is currently concentrated among outlets based in Europe (4 of 4 geographically-identified sources).
How outlets' accounts compare
Timeline
Developments from this story's sources, dated background we compiled and fact-checked, and our earlier coverage. Each row says which.- Parliament passed the Gas Act, providing for the privatisation of British Gas.Background · compiled and fact-checked by Updat3
- Domestic gas competition became available across Great Britain.Background · compiled and fact-checked by Updat3
- The Utilities Act established Ofgem as the regulator for gas and electricity markets.Background · compiled and fact-checked by Updat3
- In October 2022, the government introduced the Energy Price Guarantee to limit the unit rates and standing charges paid by households on standard tariffs as wholesale energy costs rose.Background · from our historical context
- Ofgem began examining whether the balance between fixed charges and usage-based rates treated low-use households fairly.Background · compiled and fact-checked by Updat3
- The regulator’s July 2024 decision left suppliers free to set the split within the cap.Background · from our historical context
How we got here
In March 2024, Ofgem consulted on options for changing how standing charges appeared on household energy bills; in July it said it would not require a fundamental change to the system. In the UK retail market, they contribute to costs such as maintaining energy networks and operating meters, as well as some policy costs.
The price cap, introduced in January 2019 under the Domestic Gas and Electricity (Tariff Cap) Act 2018, limits standing charges and unit rates separately for covered tariffs; it does not make the daily charge identical for every customer or supplier.
Original sources
5 articles from 4 outletsEvery story links to the reporting it was built from. How we choose sources
Spotted a factual error, a broken link or a misleading summary? Tell us.