Standing charges on gas bills, which cover the cost of delivery to homes and businesses, will be scrapped from 2027 “or as soon as possible after”, the Treasury said.

Standing charges are fixed daily fees applied separately to gas and electricity bills, which customers pay regardless of use.

Ofgem will aim to deliver the removal of these charges "in 2027 or as soon as possible after", the Treasury says.

It also says that "targeted mitigation for a small number of households" will also be laid out.

Under the current energy price cap, the gas standing charge is £108 a year on average, which customers pay regardless of what they use.

Mr Healey will deliver his first Budget in the Commons on Wednesday afternoon and said the change will give families “breathing space” and make the energy system fairer.

Instead, fixed costs will be paid on the unit rate, which the Treasury said could save 60% of households an average of £45 on their annual bills.

Britain's Prime Minister Andy Burnham, right, and Chancellor…