TREASURY PLANS TO SCRAP GAS STANDING CHARGES

The Treasury says it will scrap standing charges on gas bills from 2027, “or as soon as possible after”. The charges cover the cost of delivering gas to homes and businesses. The Treasury announced the plan on Wednesday morning, ahead of John Healey’s first Budget speech as Chancellor. Healey was due to present the Government’s tax and spending plans in the Commons after Prime Minister’s Questions at midday. An estimate puts possible household savings from the change at between £22 and £50 a year.

Healey has also announced a 2p increase in the price of a pint and cuts to the cost of supermarket staples, including baked beans, gherkins and chocolate. The Government has announced the removal of import tariffs on more than 100 products. Measures announced ahead of the Budget also include changes to parental pay and carers allowance. The Treasury has placed the gas charge plan among its measures addressing the cost of living.

Money expert Martin Lewis called standing charges a “poll tax on energy” as the Government prepared to remove them from gas bills. Lewis told BBC Radio 4’s Today programme: “They are a moral hazard. They are a disincentive for users to cut their bills.” He said people had contacted him about the share of their bills made up by standing charges. Lewis met Healey at No 11 on Wednesday. The Treasury’s proposed start date leaves the precise timing of the change open if it cannot take effect in 2027.