Burnham Cuts Energy-Bill VAT to 0% as £850 Million Funding Plan Draws Fire
Updated
Updated · BBC.com · Jul 21
Burnham Cuts Energy-Bill VAT to 0% as £850 Million Funding Plan Draws Fire
3 articles · Updated · BBC.com · Jul 21
Summary
Household electricity VAT will fall from 5% to zero in England, Wales and Scotland from October, saving a typical household about £45 a year under Andy Burnham’s first flagship cost-of-living measure.
£850 million for the cut this financial year is meant to come from scrapping Keir Starmer’s digital ID rollout, but former ministers and opposition parties say that scheme was never fully funded and question the savings.
Burnham used his first cabinet meeting to tell ministers to make living costs the government’s top priority and prepare further measures, while insisting any new policy would be paid for through reprioritised spending before his first Budget.
John Healey, unexpectedly installed as chancellor after a sweeping reshuffle, pledged tax-and-spending discipline even as Burnham pushes faster intervention, including £340 million over five years for rough sleeping.
The new prime minister is also reshaping the state around that agenda, creating a Manchester-based 'No 10 North' with economic and devolution powers and asking civil servants to relocate.