UK Chancellor John Healey Scraps Gas Standing Charges in Autumn Budget

Chancellor John Healey announced on Wednesday that standing charges on household gas bills will be scrapped, a move expected to benefit millions of Britons.

The Treasury stated that the charges, which cover the costs of delivering energy to homes and businesses, will be eliminated from next year, or as soon as possible thereafter. Instead, these fixed costs will be incorporated into the unit rate of energy consumption. The government estimates that this change will result in an average annual saving of £45 for approximately 60% of UK households.

Healey is set to deliver the full Budget statement to the House of Commons around 12:30 p.m. Amidst significant pressure to address the cost-of-living crisis and bolster the nation's economy, the Chancellor is also anticipated to announce measures targeting fuel duty and businesses, with speculation of a potential tax increase on banks.

Prior to this announcement, Healey had emphasized providing 'breathing space' for households facing soaring costs. The Budget is expected to include additional support for lower-income households with energy bills, a freeze on fuel duty, measures to assist first-time homebuyers, and tax relief for small businesses. The minimum wage for young people is also slated for an increase next year, though not as significantly as in previous budgets.

To fund these initiatives, Healey is reportedly planning to increase the tax burden to record levels, potentially through a renewed tax on banks and a crackdown on online retailers. However, unlike his predecessor, he is not expected to introduce major tax and spend policy shifts, adhering to Labour's promise not to raise VAT, income tax, National Insurance, or corporation tax.

In a prior move, John Healey had resigned as Defence Secretary in June, citing a refusal by then-leader Keir Starmer to commit to increased defense spending. Healey had advocated for a target of increasing defense spending to 3% of GDP by 2030. The current Budget is expected to detail modest increases in defense spending, addressing a £5 billion deficit in the Defence Investment Plan by reallocating funds from Net Zero and road projects, rather than a commitment to the 3% GDP target.