Tuesday 21 / July / 2026
London: Britain's new Prime Minister Andy Burnham on Tuesday announced that there would be a cut in taxes on household electricity bills, by removing VAT from October 1.
In a statement issued by Downing Street, the measure was described as an effort to "give millions of households breathing space this winter."
"We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope," Burnham said.
According to the government statement, cutting VAT on electricity bills was expected to shave off £45 (€52.97, $60,48) off the yearly price cap.
The statement went on to say that the measure was being funded through the cancellation of the Digital ID program that was going to cost £1.8 billion over the next three years.
Burnham to convene first cabinet meeting
Burnham is expected to set out his first policies as new British prime minister as he convenes his first cabinet meeting on Tuesday.
On Monday, as he took office, Burnham said he would present a 10-year plan for a new economic and political model by the end of the year.
He said he was aware that the UK is facing a cost of living crisis and promised to put forward a few proposals to ease the situation.
The Labour leader said his very first concern was to "end rough sleeping in this country" and alleviate the housing crisis, before promising to "bring back hope" to all UK residents.
Burnham has made some key changes to his administration. Ex-defence secretary John Healey replaces Rachel Reeves as finance minister, Ed Miliband becomes foreign secretary and left-wing figurehead Angela Rayner returns to her old post as housing secretary.
Rayner had resigned from her position as deputy prime minister and housing minister in September 2025, amid a property tax controversy.
