{"id":703002,"date":"2026-07-21T07:56:12","date_gmt":"2026-07-21T07:56:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/703002\/"},"modified":"2026-07-21T07:56:12","modified_gmt":"2026-07-21T07:56:12","slug":"andy-burnham-to-cut-vat-on-electricity-bills-as-first-cost-of-living-move-andy-burnham","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/703002\/","title":{"rendered":"Andy Burnham to cut VAT on electricity bills as first cost-of-living move | Andy Burnham"},"content":{"rendered":"

Electricity bills will be reduced by an average of \u00a345 a year from October, after Andy Burnham<\/a> announced the government would remove VAT from them.<\/p>\n

The new prime minister said on Tuesday he was implementing an immediate tax cut to help ease cost of living pressures for households in Britain.<\/p>\n

The move comes a day after Burnham became prime minister, promising to give voters \u201csome breathing space\u201d on living costs with a series of policy interventions.<\/p>\n

Burnham said in a statement: \u201cI said I wanted to give people breathing space, and that\u2019s what I\u2019m announcing on my second day as prime minister.<\/p>\n

\u201cWe\u2019re taking immediate action to cut taxes on energy bills, put more money in people\u2019s pockets and bring back hope.\u201d<\/p>\n

It would be funded, officials said, by Burnham\u2019s decision to scrap the digital ID scheme.<\/p>\n

However, less than an hour after the move was announced, Darren Jones, who was sacked as chief secretary to the prime minister in Burnham\u2019s reshuffle, raised doubts over the funding.<\/p>\n

He said the digital ID project was unfunded and questioned how the VAT cut would be paid for.<\/p>\n

In a post on X, he said: \u201cGood news that VAT will be cut on electricity bills.<\/p>\n

\u201cIt\u2019s a simple way for families to save a few quid, and to mechanically help to keep inflation that little bit lower.<\/p>\n

\u201cBut the DigitalID program was unfunded. The government will have to set out how it will pay for its new policies at the budget.\u201d<\/p>\n

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The chancellor, John Healey<\/a>, said: \u201cToday\u2019s energy tax cut will give families some breathing room on bills, and provide some reassurance this winter.\u201d<\/p>\n

Burnham became prime minister on Monday with a pledge to \u201cbring back hope\u201d<\/a> to Westminster politics by easing the cost of living, de-privatising utilities and ending rough sleeping.<\/p>\n

He surprised many in Westminster with his choice of Healey as chancellor after intense lobbying from allies of both Ed Miliband and Shabana Mahmood.<\/p>\n

On Tuesday, Burnham is expected to set out further detail on his cost of living plans, including the electricity bill tax cut.<\/p>\n

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Downing Street said the move would remove about \u00a345 from the annual price-capped electricity bill at a cost of \u00a3850m in 2026-27.<\/p>\n

Ending the ID scheme is due to save \u00a31.8bn over three years.<\/p>\n

Appearing on BBC Radio 4\u2019s Today programme, Burnham\u2019s newly appointed business secretary, Jonathan Reynolds, said the cut to VAT on electricity bills was \u201ca statement of priorities\u201d.<\/p>\n

Responding to Jones\u2019s claim that the cut remains unfunded, Reynolds said: \u201cThey are part of the government\u2019s pressure, it is a legitimate decision to remove that pressure and instead use the allocation of resources \u2026 It\u2019s a straightforward switch spend, it\u2019s the right decision to make, and one that will be made by the British people.\u201d<\/p>\n

Healey will set out detailed costings of the plan, and more long-term action to bring down living costs, at the budget later this year. Burnham\u2019s allies have talked about reducing the cap on bus fares and even temporarily freezing rents in the private sector.<\/p>\n

As well as bringing down bills, the move will help encourage consumers to replace gas boilers with electric heat pumps, given the gap between gas and electricity prices will now be reduced.<\/p>\n

In Northern Ireland, consumers will continue to pay VAT, as they are bound by commitments to adhere to EU tax laws.<\/p>\n

However, the government said it would give the Northern Ireland executive an equivalent amount of funding to spend on its own cost of living package.<\/p>\n","protected":false},"excerpt":{"rendered":"Electricity bills will be reduced by an average of \u00a345 a year from October, after Andy Burnham announced…\n","protected":false},"author":2,"featured_media":703003,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":["post-703002","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-gb","tag-great-britain","tag-greatbritain","tag-news","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/703002","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=703002"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/703002\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/703003"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=703002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=703002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=703002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}