Full Breakdown
Burnham Calls for Removal of Gas Standing Charges Amid Jackdaw Gas Field Approval
By Drooid · · How we work
Core Event: Request to Scrape Gas Standing Charges
At Prime Minister’s Questions on October 21, Prime Minister Andy Burnham announced that he has asked Chancellor John Healey and Energy Secretary Miatta Fahnbulleh to examine whether the daily standing charge on gas bills can be removed and to report back to Parliament “as soon as possible.” The request follows the government’s decision to approve drilling at the Jackdaw gas field in the North Sea, which is slated to begin supplying gas this winter.
Background & Context
Licences for the Jackdaw field were granted by the previous Conservative government in 2022 and 2023 and faced legal challenges from environmental groups. The Court of Session in Edinburgh ruled that the approvals were unlawful because the climate impact of burning the extracted gas had not been considered.
Separately, the government cut the VAT on household electricity from 5 percent to 0 percent on October 1, a measure that remains in force until 31 March 2027.
Data & Statistics
- Standing charge: Ofgem reports the average daily gas standing charge for direct-debit customers at 29.68 pence, equating to £108.33 per year.
- Potential savings: Analysis by the energy-research centre Nesta estimates that abolishing the standing charge could save a typical dual-fuel household £22 per year or £27 per year, indicating a discrepancy in reported figures.
- VAT relief: The electricity-VAT cut is projected to reduce the typical household’s annual bill by £45.
- Future bill outlook: Energy UK warns that, without further action, average household energy bills could rise to £2,100 by January, up from the current £1,723 average.
- Targeted support: Energy UK suggests a £450 annual payment for low-income households to close the fuel-poverty gap.
Criticism & Opposition
He argues that the charge penalises low-consumption households, especially older people who use little gas in summer but still pay the daily fee.
Conflicting Reports & Gaps
- Saving estimates: Nesta’s projected annual savings differ between £22 and £27, with no clarification from the research centre on the variance.
- Implementation timeline: Burnham’s request does not specify a deadline for a decision, and regulators have not indicated when a revised tariff structure might be introduced.
- Scope of support: While Energy UK proposes a £450 annual top-up for low-income families, the government has not confirmed whether such a scheme will be adopted.
Verbatim Quotes
- “No one should be forced to choose between heating their home, putting food on the table and managing their health. Yet that is the reality facing millions of households this winter.” — Matt Copelands, its interim director of policy
- “Without decisive action, millions of people will face another winter of hardship and the pressure on public services will only grow.” — Matt Copelands, its interim director of policy
- “It's only a baby step, but it's a step in the right direction. I now hope Ofgem follows this route in its long-term consultation on the future structure of energy bills.” — Martin Lewis, money saving expert
- “I have many ministers’ and shadow ministers’ WhatsApps, like most journalists do, right? I use them very sparingly, but I do get messages.” — Mr Healey