Andy Burnham announces VAT cut on energy bills
Andy Burnham has announced that he will scrap VAT from domestic energy bills, effective from October 1. The initiative will be funded by the cancellation of the digital ID programme, reports BritPanorama.
The measure is estimated to cost £850 million and is currently funded for just one year. Households across the UK will see a projected saving of approximately £42, regardless of wealth disparities.
The newly appointed Prime Minister remarked, “Westminster has not been working for people for too long, with families struggling with the cost of living. That needs to change. I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as Prime Minister.”
Chancellor John Healey MP echoed this sentiment, stating, “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.”
All energy suppliers are expected to pass on the VAT cut to consumers, including those on fixed tariffs. This reduction will also extend to small businesses that qualify for domestic energy, as well as eligible charities and residential care homes.
The decision to cancel the digital ID programme is projected to free up £1.8 billion, which Burnham intends to utilise to alleviate the cost of living crisis. During his inaugural speech, he reiterated his commitment to providing immediate assistance to those in need.
Burnham’s policy reflects a practical approach to addressing cost-of-living concerns in the context of rising energy prices, and its initial rollout underscores his administration’s focus on immediate economic relief.
