@MichelleDewbs grills former Labour candidate Kevin Craig over a Labour minister’s inability to explain how the government will pay for the planned cut in energy bills
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Millions of Britons could see their energy bills fall under new Government plans.
Prime Minister Andy Burnham is considering scrapping gas standing charges worth around £108 a year.
Mr Burnham has asked Chancellor John Healey and Energy Secretary Miatta Fahnbulleh to examine whether the charges can be removed.
Speaking at Prime Minister’s Questions, Mr Burnham raised the issue after Conservative leader Kemi Badenoch challenged the Government over how it plans to help households with their energy bills.
The Prime Minister said: “I have asked the Chancellor and the Energy Secretary to look at whether we can remove standing charges from gas bills, and to report back to this House at the earliest opportunity.”
The proposed changes could provide relief for households struggling with energy costs, although the amount saved would depend on how suppliers adjust their prices.
According to energy regulator Ofgem, the average gas standing charge is 29.68p per day, equivalent to approximately £108 a year for households paying by Direct Debit.
However, the amount households pay varies depending on where they live and how they pay their bills.
Ofgem calculates standing charges using factors including regional energy consumption, the number of households in an area and the cost of maintaining and improving the energy network.
Households paying by Direct Debit can face different charges from those using prepayment meters or paying when they receive their bills.
The regulator also confirmed that gas bills include 5 per cent VAT, while electricity is exempt from VAT between October 1, 2026 and March 31, 2027.
Ofgem warned that energy costs cannot be directly compared with previous periods because of the change in VAT.
The review comes as the Government faces pressure to tackle household energy costs and strengthen Britain’s energy security.
On Wednesday, Energy Secretary Miatta Fahnbulleh approved the Jackdaw gas field in the North Sea, with production expected to begin within weeks.
The project, located around 150 miles east of Aberdeen, is expected to increase domestic gas production by around 6 per cent at its peak and provide an estimated £2.9billion boost to the economy.
It is also expected to create 27 jobs and safeguard another 273.
Mr Burnham said the decision would “protect hundreds of jobs and help keep millions of homes warm this winter.”
He added: “At a time when people are really struggling, it’s right that we look in a responsible way at maximising the existing energy reserves we have in Britain that could help.”
However, the approval is not expected to bring down household energy bills because gas prices are determined by global markets.
Chancellor John Healey said the Government needed to make greater use of Britain’s domestic energy resources amid rising prices and international uncertainty linked to the conflicts in Iran and Ukraine.
Speaking at the St Fergus gas terminal in Aberdeenshire, he said: “Now is the time, with the conflict and the rising prices, to make the most of our own homegrown energy through production from Jackdaw.”
The Government has also announced a new £2billion energy wealth fund, which will use additional tax revenues from North Sea oil and gas to support renewable and low-carbon energy projects.
Despite the approval, energy minister Michael Shanks acknowledged that the UK would remain a net importer of fossil fuels.
The decision has drawn criticism from environmental campaigners and some Labour MPs, who argue that expanding North Sea production will do little to ease household bills.
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