Burnham Scraps VAT on Electricity in His First Act as PM
Andy Burnham has used his first full day in office to remove VAT from domestic electricity bills from 1 October, his opening cost-of-living measure. The Chancellor, John Healey, said the cut is funded by cancelling the previous government’s digital ID programme and will lower the Ofgem price cap by around £45 a year. The move delivers on Mr Burnham’s Downing Street pledge to give households “breathing space”.
The cut is the first in a promised series of announcements as Mr Burnham seeks early wins to justify his uncontested arrival in Downing Street; a bus-fare cap and a rise in the frozen £12,570 personal allowance are under consideration for the autumn Budget. His first instruction on entering No 10 was to end rough sleeping, backed by £340m. “I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as Prime Minister,” he said. Watch whether energy suppliers pass the saving on in full, and how Mr Healey squares giveaways with jittery bond markets.