Chancellor John Healey is looking at cutting standing charges on gas bills as part of the government’s push to cut household energy costs, the Prime Minister has announced. 

Speaking in the House of Commons today, Andy Burnham said he had asked the Chancellor and the energy secretary, Miatta Fahnbulleh, to consider stripping “unfair” standing charges from bills. 

Standing charges are fixed daily amounts that gas firms apply on energy bills and do not vary by usage. The average UK standing charge is around 30p per day, or £103.32 a year. The costs go towards infrastructure and other operations costs, with the energy regulator Ofgem setting a cap on how much can be charged across different regions given varying costs of supplying gas. 

Burnham told the House of Commons he would look to address the additional costs facing Britons although he did not explain what he meant by “unfair”. His comments came after the government green-lit further gas drilling at Jackdaw, which could begin to supply up to six per cent of the country’s gas by the end of the month. 

“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,” Burnham said. 

The Prime Minister also stood by a Labour manifesto pledge not to offer new licences for oil and gas drilling. Jackdaw was initially approved by the Tories in 2022 but faced heavy legal challenges before a decision was called in by the energy secretary. 

The Treasury and the Department for Energy Security and Net Zero jointly announced that the National Wealth Fund would get a new arm, the Energy Wealth Fund, to re-invest £2bn of oil and gas revenue in renewables. 

Costings for £2bn in extra investment will be laid out at the Budget.

Healey to get small growth boost from Jackdaw

Capital Economics’ Neil Shearing said the new gas drilling site at Jackdaw was unlikely to have a “material impact on the UK economy” although exports and energy security could be slightly improved. 

“A more significant change could require a shift in the government’s stance on new oil and gas licences,” Shearing added. 

Tory leader Kemi Badenoch also challenged the Prime Minister to confirm whether he was considering spending cuts to the welfare bill. 

Burnham said he did not want to see “anybody in their 20s on benefits in this country”, referring to the near-1m young people out of employment, education and training. 

“The fundamentals of the British economy are getting stronger and stronger under this government. We will take the right long-term decisions and she should wait for the Budget and she will see that laid out in this House.”