Andy Burnham cuts tax on electricity bills to bring down cost-of-living
The PM will remove VAT from energy bills to “give people breathing space”
Andy Burnham has said in his first policy announcement as prime minister that he will remove VAT from electricity bills from 1 October.
Burnham said he had promised to “give a bit more breathing space” and that he was taking “immediate action” by removing the tax.
The policy will save households an average of £45 off the yearly Ofgem price cap.
The new chancellor, John Healey, said in a post on X that this will be funded by cancelling Keir Starmer’s Digital ID scheme.
Darren Jones MP, the former Chief Secretary to the Prime Minister and previously a minister in the Treasury, welcomed the policy, stating that it was “a simple way for families to save a few quid”.
However, he also said that “the DigitalID program was unfunded”, adding: “The government will have to set out how it will pay for its new policies at the budget.”
Reform’s Robert Jenrick backed scrapping VAT from energy bills, and claimed he and Nigel Farage “were the first to propose this back in March”.
However, he added that £42 a year off energy bills wasn’t enough.
Jenrick said Reform “would go much further”, by scrapping net zero subsidies to cut £200 from people’s bills.
While removing these subsidies could lower bills in the short term, it would leave the UK more exposed to volatile global gas prices, increasing costs for consumers over the longer term and doing further damage to the climate.
Olivia Barber is a reporter at Left Foot Forward
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