British Prime Minister Andy Burnham asked ministers on Oct. 21 to review fixed daily gas charges after regulated energy rates rose in October, with another increase forecast for January.
Ofgem's price-cap figure for a typical household rose 4% for Oct. 1 through Dec. 31. Individual unit rates and standing charges changed by different amounts. At those rates, a typical household on a default gas and electricity tariff, paying by direct debit in England, Scotland or Wales, would spend £1,723 over a year. That annualized figure is not a ceiling on an individual household’s bill.
Cornwall Insight forecasts that the typical annualized bill will rise 16% to £1,999 in January 2027. The projection is not an announced rate. Ofgem is due to announce its next cap by Nov. 25.
Burnham told lawmakers that Chancellor John Healey and Energy Secretary Miatta Fahnbulleh would examine whether the daily gas fee could be removed. He asked them to report back as soon as possible but gave no date. Burnham announced no immediate change to bills.
Gas customers pay the standing charge each day, including when they use no gas. Ofgem puts the average gas charge for direct debit customers in England, Scotland and Wales at 29.68 pence a day from October through December. The fee helps cover the cost of maintaining the energy system.
Minister for Energy Michael Shanks said the gas network would still need funding if the charge were removed. Ofgem expects tariffs with lower standing charges to carry higher prices per unit of energy, potentially increasing bills for households that use more.
The review came as Burnham defended the decision to clear the Jackdaw gas field in the North Sea. Fahnbulleh agreed to the decision, and the North Sea Transition Authority granted production consent. A Scottish court had found an earlier consent unlawful because the environmental assessment omitted emissions from burning the gas.
Burnham said resources from Jackdaw would help fund renewable energy. Shanks said production from the field would not itself lower household bills. Conservative leader Kemi Badenoch criticized the time taken to approve Jackdaw and called for an end to the ban on all new oil and gas licenses. Ofgem’s next price cap announcement is due by Nov. 25.
