What if we paid for electricity through taxes, not bills?

By Colin Nolden, Senior Research Fellow, Energy Institute, University of Sheffield

The UK government has announced that standing charges will be removed from gas bills and that it intends to also remove them from electricity bills. Standing charges are a fixed fee paid by every household, regardless of how much they use. Under the proposed change, the costs they cover would instead be covered through unit rates, thereby ensuring that the costs are spread more fairly among those using more or less gas.

The budget also extends a temporary suspension of VAT on electricity and introduces a one-off payment of £100 to households in council tax bands A-D. Together, these…

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