Government to scrap gas standing charges in 2027 after Martin Lewis campaign

The Government has confirmed plans to abolish standing charges on gas bills, following a campaign led by consumer champion Martin Lewis. According to reporting from the Chard and Ilminster News, the fixed fees will be scrapped to remove what has been widely criticised as a penal system for low-energy users. The announcement emerged as Chancellor John Healey delivered his autumn Budget to the Commons, setting out Labour’s tax and spending plans against a backdrop of international economic headwinds and rising energy costs, as detailed by The Independent.

Standing charges are fixed daily amounts added to energy bills regardless of consumption. For years, campaigners have argued that these fees unfairly burden households that actively reduce their energy use. Following a meeting with the Chancellor, Mr Lewis celebrated the decision to remove the gas charge, which typically costs households around £108 annually. In contrast, The Independent noted that pre-Budget expectations pointed to potential household savings of up to £50 a year.

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Under the planned restructuring, the revenue generated by the standing charge will be shifted into the unit rate paid for each kilowatt-hour of gas consumed. While this brings relief to lower-volume users, it introduces a dividing line for households with higher energy needs. According to estimates cited in the Chard and Ilminster News, approximately 60% of households are expected to see average annual savings of £45, whereas the remaining 40% who consume above a certain threshold could pay more. Mr Lewis estimated that this dividing line could sit around 12,500 kilowatt hours of gas a year, though the final figure depends on the rates eventually set.

The timing of the reform remains subject to adjustment. The Chard and Ilminster News reported that the changes could align with the energy price cap in October 2027, although January 2028 is another potential implementation window. Furthermore, questions remain over electricity standing charges. Mr Lewis indicated that while the Chancellor agreed to discuss electricity charges with Ofgem, the process was described as trickier and will require significantly more time to resolve.

The wider fiscal announcement delivered by Mr Healey touched upon numerous economic pressures facing the UK. The Independent reported that the Chancellor warned of global economic storms driven by international conflicts, including the war in the Middle East and the ongoing conflict in Ukraine, which have driven up oil and gas prices. Alongside the energy reforms, the Government’s fiscal package includes a freeze in fuel duty and an increase in the minimum wage by nearly 4 per cent.

As the debate surrounding taxation and public spending continues, readers can monitor ongoing developments via our dedicated Cost of Living section.