UK Prime Minister Andy Burnham has scrapped value-added tax on domestic electricity bills in his first major policy announcement since taking office.
The VAT rate on household electricity will drop from 5 percent to zero starting October 1, saving an average family around £45 a year as winter approaches, the government said.
Chancellor John Healey described the move as a direct response to long-running cost-of-living pressures. “For too long, too many people have struggled with the cost of living,” Healey said. “Today’s energy tax cut will give families some breathing room on bills, and provide some reassurance this winter.”
Burnham echoed the sentiment, saying the policy would offer “breathing space” for households facing financial strain. The measure will be financed by cancelling the Digital ID programme, officials added.
The announcement came just a day after Burnham assumed the premiership and named his cabinet, which includes Ed Miliband as foreign secretary, Louise Haigh as Chancellor of the Duchy of Lancaster, and Wes Streeting as defence secretary. Angela Rayner returned as housing secretary while Shabana Mahmood kept her post as home secretary.
The tax relief is expected to help dampen inflation while providing tangible support to consumers amid ongoing economic challenges.
