UK to remove fixed gas fees from 23 million bills

British households pay a fixed daily fee on their gas bills whether or not they turn on a stove. Chancellor John Healey announced on Tuesday that the government will end this practice for approximately 23 million homes.

The Treasury estimates that the change will benefit sixty percent of account holders. The average household stands to save £45 annually. Under the current system, this fixed cost amounts to £108 per year. The fee applies regardless of usage levels.

Healey plans to present the measure in his budget statement in the House of Commons later this week. He intends to direct Ofgem, the energy regulator for Great Britain, to remove the charges next year or as soon as possible thereafter. The goal is to align energy pricing more closely with actual consumption patterns.

Energy Secretary Andy Burnham described the abolition of these fees as a matter of basic fairness. He said the reform aims to give people greater control over their bills. Burnham expressed determination to fix what he called a broken energy market. Prime Minister Keir Starmer noted that he had asked the Treasury to investigate the issue just one week ago.

Healey argued that the decision provides breathing space for millions of families. He stated that his budget draws a clear line regarding an energy policy that has failed billpayers for years. The previous approach allowed extra costs to accumulate, leaving households more exposed to global economic shocks.

Miatta Fahnbulleh, also serving as energy secretary, said she would continue to protect people from unaffordable bills. This stance supports the government goal of stabilizing household energy costs. The move follows a VAT cut on electricity bills implemented at the start of the month. That reduction made the Ofgem price cap £45 lower than it would otherwise have been.

Greg Jackson, chief executive of Octopus Energy Group, welcomed the move as an example of joined-up thinking. He noted that the change delivers lower standing charges and an improved ratio of electricity to gas prices. Jackson suggested that most customers would see a cut in their gas bills. Higher savings are possible for those who transition to heat pumps.

The government recently approved the Jackdaw gasfield in the North Sea. It also announced a new energy wealth fund to support investment in cheap and clean power sources. These moves aim to balance immediate cost relief with long-term energy strategy.