Andy Burnham has said ministers will consider whether standing charges can be removed from gas bills to ease cost pressures on households.
The Prime Minister told the Commons he had asked Chancellor John Healey and Energy Secretary Miatta Fahnbulleh to examine scrapping the charges and to report back to MPs as soon as possible.
Mr Burnham was asked about the Government’s decision to approve for the Jackdaw gas field in Prime Minister’s Questions.
He said he had made a decision that the previous Tory government “messed up”.
Prime Minister Andy Burnham on his way to PMQs on Wednesday (Stefan Rousseau/PA)
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“That’s why there was the delay, because they didn’t do the process properly. And we’ve made a pragmatic decision, Mr Speaker, that will allow us to do two things.
“Firstly, build a bridge to a renewable future because the resources that come in now from this decision will allow us to invest in renewables, bring forward clean energy and in this Parliament, substantially de-link gas and electricity prices so that we can bring bills down.
“It will also allow us, Mr Speaker, to do more to help people with bills. I can tell the House today that I have asked the Chancellor and the Energy Secretary (Miatta Fahnbulleh) to look at whether we can remove standing charges from gas bills and to report back to this House at the earliest opportunity.”
Conservative leader Kemi Badenoch had criticised the Labour Government for “dithering” for two-and-a-half years to approve Jackdaw, as she called for Labour to repeal its ban on all new oil and gas licences.
“We have the resources, the expertise and the people,” she said. “What we have lost is the confidence to make tough decisions”.
A 4% hike to Ofgem’s energy price cap took effect from October 1 as forecasters warned household bills could soar by almost another £300 from January.
Cornwall Insight’s latest forecast predicts the price cap will rise by a further 16% to £1,999 a year on January 1, up by £276 on the level between October and December and the biggest rise since January 2023.
In an effort to help households, the Government has temporarily removed the 5% VAT from electricity bills until March 31 next year to cut around £45 a year.
Households are still paying 5% VAT for gas.
Mr Burnham said he had asked Chancellor John Healey, second right, and Energy Secretary Miatta Fahnbulleh, right, to examine scrapping the charges and to report back (Paul Reid/PA)
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Last week, Ofgem’s new chief executive Tim Jarvis warned of a “difficult” winter ahead as he raised concerns that “people are going to struggle” without help.
Speaking at the Energy UK conference in London, he said: “We can all see what’s happening to wholesale prices as a result of what’s going on in the Middle East, and we’ve seen the predictions for January.
“It’s going to be a difficult winter.”
Campaigners have urged the Government to make plans now to support all households with energy costs this winter because of the severity of forecast bill hikes.
The End Fuel Poverty Coalition has urged ministers to prepare an “emergency heat tariff” to cap the cost of heating this winter, with gas prices already rising 27% year-on-year.
A poll for Uswitch suggests some 1.7 million households will not turn on their heating this winter amid fears of soaring bills and efforts to save money.