The Prime Minister has issued a significant update on the charge ahead of the Budget
The Prime Minister has announced a significant update on a charge Martin Lewis says must be scrapped. The money expert calls it the “biggest single cause of complaint I get about energy bills, by a mile.”
Now Andy Burnham says he has asked Chancellor John Healey to look at removing standing charges from gas bills. These are a fixed daily fee added to your energy bill, regardless of how much gas or electricity you use. People in the UK currently pay over £100 a year for them.
Speaking at Prime Minister’s Question Time, Mr Burnham said: “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.”
He made the announcement as it was today revealed that the decision has been made to approve the Jackdaw gas field. It will begin supplying gas to homes and businesses from the end of the month, the Government declared this morning.
Energy Secretary Miatta Fahnbulleh said: “Following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers.
“This decision will support the country’s energy security with homegrown gas this winter and help minimise the UK’s use of imported higher emission fuels as we continue our transition to renewables and nuclear.
“The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licences for oil and gas and achieving net zero by 2050.”
There had been a long delay over the decision due to a legal challenge. Opponents say the scheme should not go ahead due to the impact it will have on the environment.
Mr Burnham said at lunchtime in Parliament that the government had made a decision that the previous Tory government “messed up”. Mr Burnham said: “That’s why there was the delay, because they didn’t do the process properly. And we’ve made a pragmatic decision, Mr Speaker, 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.”
Mrs 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.
“We have the resources, the expertise and the people,” she said. “What we have lost is the confidence to make tough decisions”.
Martin Lewis and the standing charge
Mr Lewis is a major critic of the standing charge. He sees them as like a charge given to a shopper just for entering a shop – even if they buy nothing.
Speaking on his MoneySavingExpert website earlier this year, he said: “The current Standing Charge is a moral hazard that disincentivises lower usage and keeps bills high for people who use very little energy. It’s the biggest single cause of complaint I get about energy bills, by a mile.
“Paying £300+ a year simply for the facility of having energy is too much. It also penalises older people who don’t use gas in the summer yet still pay for it every day.
“I’ve pushed on this for years, and it’s good to finally see some (albeit small) movement.” The current daily standing charge for gas is 29.68 pence, according to Ofgem, the energy regulator. That figure for the whole year adds up to £108.33 a year.
