With the average charge currently around 30p a day, households pay more than £100 a year before using any gas.

EUA CEO Mike Foster said:

"The Prime Minister is right to challenge a system where a household can use no gas and still get a gas bill.

"But scrapping the standing charge must mean more than moving money from one line of the bill to another. Government now needs to decide honestly which costs should be paid by gas consumers and which are properly matters for general taxation."

EUA says three approaches should be considered: incorporate fixed energy-system costs into the unit rate; fund appropriate costs through general taxation; or adopt a hybrid model in which energy-related costs stay with energy consumption while wider social-policy costs move to taxation.

Mike Foster added:

"Our starting principle is simple: energy bills should pay for energy. If Government wants consumers to use less, insulate their homes and improve efficiency, those households should see the full benefit of doing so."

EUA says any move to a higher unit rate should be accompanied by targeted protection for low-income households with unavoidable high heating requirements, including those falling outside existing Warm Home Discount support.

"Low income plus high energy need is where Government should focus its protection. Targeted support is fairer than making every household pay a fixed charge regardless of how much energy it uses."