United Kingdom Prime Minister Andy Burnham has announced the abolition of Value Added Tax (VAT) on household electricity bills in his first major policy decision since assuming office.
The government said the VAT rate on domestic electricity will be reduced from five per cent to zero per cent from October 1, a move expected to save the average household about £45 annually.
According to the government, the tax cut will be financed by cancelling the proposed Digital ID programme.
Announcing the measure, Burnham said the policy was aimed at easing the burden of the cost-of-living crisis and providing immediate relief for households facing rising energy costs.
“This will give families some breathing space as we work to ease pressure on household finances,” the Prime Minister said.
UK Chancellor John Healey described the decision as a key step toward lowering inflation while offering financial support to millions of households.
“For too long, too many people have struggled with the cost of living. Today’s energy tax cut will give families some breathing room on bills and provide some reassurance this winter,” Healey said.
The announcement comes just a day after Burnham officially took office and unveiled his new cabinet.
Among the key appointments, Ed Miliband was named Foreign Secretary, Louise Haigh became Chancellor of the Duchy of Lancaster, and Wes Streeting was appointed Defence Secretary. Angela Rayner returned as Housing Secretary, while Shabana Mahmood retained her position as Home Secretary.
The VAT cut is expected to be the first of several measures under Burnham’s administration aimed at addressing economic challenges and improving household living standards.
