UK Politics
9.9 Million Homes Will Pay More for Gas When Healey Scraps the Standing Charge, and Ministers Won’t Say Where the Line Falls
Scrapping the £108 gas standing charge leaves 9.9 million households paying £61 a year more on average, the Resolution Foundation finds. Ministers won’t publish where the line falls.
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Should Healey drop his plan to move the gas standing charge on to every unit of gas?
News | By Matt, Editor
9.9 million households will pay more for their gas once John Healey scraps the standing charge, according to the Resolution Foundation. The ones that lose will be about £61 a year worse off on average, and big families are the most likely to be hit.
The Chancellor sold it at the Budget as making bills “fairer”. But the cost of the standing charge, about £108 a year, isn’t disappearing. It’s being moved on to the price of every unit of gas you burn, so the more you need to heat your home, the more you’ll pay. And when an MP asked ministers to publish the figures showing where the line falls between winners and losers, Tuesday’s answer gave no figure.
Key facts
- Healey has asked Ofgem to remove the standing charge on household gas bills in 2027 “or as soon as possible after”. It’s about £108 a year for a typical home and is paid even if you use no gas at all, the Treasury says.
- The cost doesn’t go away. Suppliers will recover it through a higher unit rate instead, which the Resolution Foundation puts at roughly 10% on each unit of gas.
- The government says around 60% of gas account holders will save, by an average of £45 a year. It hasn’t said how many will pay more. Resolution Foundation analysis puts it at 9.9 million households, 36% of all households, losing £61 on average, against 13.3 million who gain £46.
- Households with three or more children are hit hardest: 58% would be worse off, by £35 a year on average. For families with two children it’s 54%, paying £20 more.
- Bills shift into winter. For a typical home, payments from October to March would rise by about £20 and fall by about £30 in the spring and summer.
- Ministers will bring forward amendments to the Energy Independence Bill to make the change law.
The more you use, the more you pay
On paper this is a win for anyone living alone in a flat who barely turns the heating on. The trouble is who sits on the other side of the ledger. Larger households, people who are at home all day, and anyone who has to keep warm for their health use more gas, so they pick up the bill.
Ellen Fraser, an energy expert at Baringa, told BBC Radio 4’s Money Box that if you’re “in the house more often, if you have disabled children or retired” you are “likely, unfortunately, to see a bit of an increase in your overall gas bill”. She said it would “disadvantage those folks who just have no choice but to keep their homes warm for the reasons of health”, as Birmingham Live reported.
Dr Craig Lowrey of Cornwall Insight called it “a broadly progressive move” but warned: “Higher unit rates mean people in badly insulated homes, larger families or those who need to keep the heating on to manage a health condition, could end up paying more.”
The Resolution Foundation, a think tank once run by the Treasury minister Torsten Bell, says the switch moves around £600 million a year from higher gas users to lower ones “with no regard to their incomes”. It points out that because this is a regulatory change, the Treasury left it out of its official analysis of who wins and loses from the Budget. It calls the result part of a “shadow tax and benefit system hidden within energy bills”.
The question ministers wouldn’t answer
The SNP’s Graham Leadbitter asked the Energy Secretary to publish “the underlying data and calculations” behind the split, including “the threshold at which the impact changes from a saving to an increase”. Energy minister Polly Billington’s answer on 10 November repeated that around 60% of account holders would see bills fall. On the threshold, she said the impact “will depend on their level of gas consumption, as well as the eventual delivery model chosen by Ofgem” and that “a further assessment of the impact on different types of households will be conducted as policy develops”.
She did admit there “may be some low-income, or otherwise vulnerable households who have unavoidably high gas usage who may lose out”, and said targeted help would be set out “in due course”. That’s the same line the Treasury used on Budget day, two weeks ago.
And January is coming first
None of this lands until 2027, which is cold comfort for anyone opening a bill this winter. The price cap is £1,723 a year for a typical home now. Cornwall Insight forecasts £1,999 from January, a 16% rise and the biggest since January 2023. Some suppliers’ forecasts go higher still, up to £2,183, or 27%, according to a round-up of forecasts. Ofgem confirms the real figure on 25 November.
It follows our report that £350m of Labour’s £100 energy payment goes to the richest fifth of homes while 700,000 of the poorest get nothing, and that wind fell to 2% while one gas plant was paid £1.4m an hour. Healey’s Budget has already handed three million self-employed people two tax bills in one year.
The other side
Plenty of people wanted this. Consumer campaigners, Martin Lewis among them, have argued against standing charges for years. Polling by More in Common’s Luke Tryl found strong support across party lines. Low users, including two-thirds of single pensioners by the Resolution Foundation’s count, should come out ahead, by about £28 a year. Prepayment customers who self-disconnect will stop running up debt on a charge for gas they aren’t using. And the government says the typical household on median gas use will benefit.
The median gain is small, though: £13 a year, less than 1% of a typical bill, on the Resolution Foundation’s figures. For the losers, the hit is nearly five times that.
Our view
Healey wants credit for scrapping a charge, but he hasn’t scrapped a penny of cost. He has moved it on to the families who use the most gas, the big households and the people stuck at home, and called it fair. If he’s confident the numbers stand up, he should publish them. Instead, ministers told Parliament they’ll work out who loses “as policy develops”. That’s not good enough for 9.9 million households who face a forecast January price rise first. Ofgem should not sign off a single unit-rate increase until the government says exactly who pays, how much, and what help they get. This comes from the same Chancellor whose Budget was meant to give families “breathing space”, and the same energy bill that could open HMRC records to energy firms.
Should Healey drop his plan to move the gas standing charge on to every unit of gas? Vote in our poll below.
Sources
- HM Treasury, DESNZ and No 10, Chancellor abolishes standing charges on gas bills, 28 October 2026: £108, 60% save £45, Healey quote, mitigation “in due course”
- Written question 40090, Graham Leadbitter MP, answered by Polly Billington MP, 10 November 2026
- Resolution Foundation, What does the abolition of the gas standing charge mean for households?, 30 October 2026: 9.9m worse off by £61, 13.3m better off by £46, family and pensioner figures, £600m
- Birmingham Live, 3 November 2026: Ellen Fraser (Baringa, BBC Radio 4 Money Box) and Craig Lowrey (Cornwall Insight) quotes
- DESNZ, Energy Independence Bill, 4 November 2026
- GOV.UK, What the Autumn Budget 2026 means for your energy bills
- Cornwall Insight, January 2027 price cap forecast, 30 September 2026; Look Into, January 2027 forecasts round-up
Main image: Chancellor John Healey (then Defence Secretary) at a Treasury roundtable, May 2025, UK Government, CC BY 2.0, with a gas hob ring, BogTar201213, CC BY-SA 4.0.
Related
- £350m of Labour’s £100 Energy Payment Goes to the Richest Fifth While 700,000 of the Poorest Get Nothing
- Wind Fell to 2% and One Gas Plant Was Paid £1.4m an Hour, as Ministers Said Clean Power Would Cut Bills
- 3 Million Self-Employed Face Two Tax Bills in One Year, as Healey’s Shake-Up Pulls In £17bn
- Labour’s Energy Bill Could Open HMRC Records to Energy Firms
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