Chancellor scraps standing charges on gas bills as he vows to 'back entrepreneurs' in first Budget

The Chancellor has vowed to bring down energy costs "for good" - as John Healey pledged to offer Brits "fresh hope" in his first Budget under Burnham. Reports suggest Healey will unveil cuts to household energy bills when he delivers his first Budget on Wednesday, with gas bills slashed by up to £50. Standing charges on gas bills will be scrapped from 2027 “or as soon as possible after”, the Treasury said. It's expected to be a widely unremarkable Budget, as he attempts to settle the markets and leave the door open for a possible general election in the coming months.

It comes as industry estimates suggest household energy costs could be cut by between £22 and £50 annually. Healey is facing a difficult economic backdrop, with UK debt surpassing £3 trillion for the first time in history. The Chancellor is constrained by the already stretched state of public finances, made worse by international market turmoil caused by the Iran war. Read more: Can Andy Burnham’s honeymoon survive a slimmed down, 'boring' budget? writes Natasha Clark Read more: Chancellor unveils £15m plan to tackle misogyny ahead of Budget He is sticking with the rules set by predecessor Rachel Reeves , requiring day-to-day spending to be financed by taxes rather than borrowing by 2029/30 and that public debt as a share of the economy should fall in the same year.

Measures designed to mitigate the cost of living are expected to feature heavily in Wednesday's statement, with Mr Healey expected to cancel January’s planned increase in fuel duty. The rate would instead remain frozen for the 16th year at 52p per litre, as first reported by The Sun. Mr Healey and the Energy Secretary Miatta Fahnbulleh have also reportedly been ordered by the Prime Minister to examine scrapping standing charges from gas bills.

Ending standing charges, along with other measures under consideration to limit the Energy Secretary’s power to levy net zero charges on household bills, are expected to cut household gas bills by up to £50 a year, the Telegraph reports. The expected announcements build on the Government's focus on "everyday fixes" designed to ease day-to-day financial pressures on households. Ministers previously announced plans to make a higher tax-free mileage allowance of 55p permanent, and to slash tariffs on a range of popular foods, including chocolate, beans and gherkins, to make them cheaper for shoppers.

The Chancellor is also set to announce a rise in the minimum wage by nearly 4%, while ending the trend of hiking the national minimum wage for those aged 18 to 20 by more than the rate for older workers, raising it instead roughly in line with the rate for over 21-year-olds, according to reports. He is also expected to end the Carers’ Allowance cliff edge which has penalised unpaid carers for going over their earnings limit, even by as little as a few pence per week.

Opposition critics have pressured the Chancellor to use the Budget to set out a clear path for defence spending to hit 3% of national income by 2030, but he looks set to wait until next year’s spending review before announcing this road map. In a video message released ahead of Wednesday, Mr Healey claimed his Budget would provide "breathing space for today and fresh hope for the future". But he added: “The world’s a highly uncertain place.

Conflicts abroad are pushing up energy prices, and the cost of living here at home – piling pressure on families, on businesses, and on our public finances." “But Britain’s economy is showing real signs of resilience: investments up, productivity is growing, and we had the joint fastest growth in the G7 in the first half of this year.” Mr Healey said: “This Budget is designed to give households breathing space from some of the everyday costs, provide targeted support for businesses and self-employed people, and to start the long-term action needed to get energy costs down for good.”

He insisted that “in an uncertain world, we will strengthen national security and our defences, as well as our support for Ukraine”. Opposition critics have pressured the Chancellor to use the Budget to set out a clear path for defence spending to hit 3% of national income by 2030, but he looks set to wait until next year’s spending review before announcing this road map. The Tories said Mr Healey was set to “shy away” from the difficult decisions, including bringing down the welfare bill, which the Prime Minister has said he does not want to do through “crude cuts”.

Shadow chancellor Andrew Griffith said: “Our public finances are on a cliff edge. John Healey must use his Budget to take tough decisions, instead of continuing to kick the can down the road. He must stop maxing out the nation’s credit card, tackle the out-of-control welfare bill and address rising global threats. “If Healey fudges defence spending rather than properly funding 3% by 2030 in his Budget, he must resign. Defence is the first duty of any government, and we cannot leave our armed forces waiting any longer.

“The Conservatives are the only party with a plan to back hard work, cut spending, cut taxes and get Britain working again.” The Liberal Democrats warned against a “steady as she goes” Budget and urged the Chancellor to go further by cutting fuel duty and other costs. Reform UK’s Treasury spokesman Robert Jenrick accused Mr Healey of “fiddling while the economy burns”. “Borrowing costs are soaring, national debt has surpassed £3 trillion, and the tax burden is at a record high.

We need a break-glass Budget that finally puts the economy back on track,” he said.