A one-bed flat pays the same daily gas fee as a mansion in the same region, and Andy Burnham just asked his ministers to scrap it

Prime Minister Andy Burnham has asked his ministers to draw up a plan to remove standing charges from gas bills. As reported by BBC News, Burnham raised the issue during Prime Minister’s Questions.

Standing charges are fixed daily fees that cover the cost of being connected to the gas supply. They vary by region and must be paid every day, even if no gas is used, meaning a one-bed flat can pay the same daily fee as a mansion in the same area.

Burnham said the “pragmatic decision” to approve the Jackdaw gas field in the North Sea should allow the government to invest more in renewables and help more people with their bills. He said he had asked Chancellor John Healey and Energy Secretary Miatta Fahnbulleh to “look at whether we can remove standing charges from gas bills” and report back to the House at the earliest opportunity.

Where the cost would land is still an open question

Few details have been released on how the change would work. Energy UK, a major industry body, said whether the move makes a difference to bills depends on how or where the charges are reallocated. The proposal is one of Burnham’s early policy moves since taking office in July, a period that also saw him exchange messages with an impostor posing as a senior White House official.

Research firm Nesta has suggested moving the charges onto the unit rate, meaning customers would pay more for each unit of gas used but nothing simply for being connected. This would likely benefit those who use little gas, including low-income households, while heavy gas users could end up paying more overall. A research foundation has also argued the change would be progressive, potentially cutting around £27 from a typical annual bill.

Energy regulator Ofgem has been examining the issue for nearly two years, running several consultations on standing charges. The public response has been large, with significant opposition from low-energy users who pay the charges regardless of how little gas they consume.

Ofgem is currently running a pilot scheme testing different low standing charge tariffs. The regulator has not yet drawn any firm conclusions.