UK Prime Minister Andy Burnham cuts household electricity tax

Britain's new Prime Minister Andy Burnham has initiated his term by announcing a significant cut to household electricity taxes. Effective October 1, Value Added Tax (VAT) will be removed from electricity bills, a move the government states will put more money directly into people's pockets and offer much-needed relief this winter.

Downing Street described the decision as an immediate action to ease the cost of living crisis gripping the nation. The tax reduction is projected to save households approximately £45 annually based on the current price cap. This financial breathing room is a key promise from Burnham, who took office pledging stability and reforms.

Funding for the tax cut comes from the cancellation of the Digital ID program, a project estimated to cost £1.8 billion over the next three years. This reallocation of funds signals a shift in government priorities, focusing on immediate economic relief for citizens over the digital identity initiative.

Burnham is set to convene his first cabinet meeting, where he is expected to outline further policies, including a 10-year plan for a new economic and political model. His administration also sees key appointments, with John Healey replacing Rachel Reeves as finance minister and Ed Miliband becoming foreign secretary. Angela Rayner returns to her previous role as housing secretary.

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We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.