Andy Burnham Cuts VAT on Electricity Bills to Ease Living Costs 2026

David Hansen
Andy Burnham Cuts VAT on Electricity Bills to Ease Living Costs
This page may contain affiliate links.

Electricity bills will be reduced by an average of £45 a year from October, after Andy Burnham announced the government would remove VAT from them. 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. This move is part of a broader strategy to provide financial relief as winter approaches.

How the VAT Cut on Electricity Bills Works

Starting in October, households across Britain will see a direct reduction in their electricity bills as the government eliminates VAT. The average saving of £45 per year is designed to give families some breathing room. The policy is funded by scrapping the digital ID scheme, though critics question the long-term financial viability.


25% Off All iHerb Brands

Find Bleeding Edge Supplements at Scandalous Prices on iHerb.


Burnham stated: “I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as prime minister. We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.” This energy tax cut is the first of several cost of living interventions promised during his campaign.

ADVERTISEMENT

Comparing the VAT Cut to Other Energy Relief Measures

Policy Average Annual Savings Effective Date Funding Source
VAT Removal on Electricity Bills £45 October Scrapped Digital ID Scheme
Previous Energy Price Guarantee £100 2022-2023 Government Borrowing
Winter Fuel Payment Expansion £200 Ongoing Treasury Allocation

While the VAT cut is modest, it targets immediate relief. However, critics like former chief secretary Darren Jones argue the digital ID program was unfunded, raising questions about the budget. The chancellor, John Healey, defended the move, saying it provides reassurance for families this winter.

Key Takeaways from the Electricity VAT Cut

  • Households save an average of £45 per year on electricity bills starting October.
  • The policy is funded by scrapping the digital ID scheme, but funding details remain unclear.
  • This is the first of several cost of living measures promised by Burnham’s government.
  • The cut aims to lower inflation and ease financial pressure on families.
  • Further details on cost of living plans are expected later this week.

Political Reactions and Next Steps

Burnham became prime minister on Monday with a pledge to “bring back hope” by easing the cost of living, de-privatising utilities, and ending rough sleeping. His choice of John Healey as chancellor surprised many, but the team is moving quickly. On Tuesday, Burnham is expected to outline additional policies, including potential changes to energy utilities and housing support.

The electricity VAT cut is a clear signal that the new government prioritizes energy affordability. While the £45 saving may not solve all financial strains, it represents a tangible step. For households struggling with high bills, this relief is welcome news.

FAQ

When does the VAT cut on electricity bills take effect?

The VAT removal on electricity bills will take effect from October, providing immediate savings for households.

ADVERTISEMENT

How much will households save from this energy tax cut?

On average, households will save £45 per year on their electricity bills due to the elimination of VAT.

How is the government funding the VAT cut on electricity?

The government plans to fund the cut by scrapping the digital ID scheme, though critics question the program's funding status.

Will this VAT cut affect inflation?

Yes, the cut is expected to mechanically help keep inflation lower by reducing household energy costs.

Stay tuned for more updates on Andy Burnham’s cost of living policies. For now, this electricity bill relief offers a small but meaningful break for families across Britain.

ADVERTISEMENT
ADVERTISEMENT
David Hansen

Author

David Hansen

An engineer, author and high-tech enthusiast whose passion has been evolving for 12 years. After contributing to numerous online publications, David shares his experiences and discoveries on Grand Goldman. He focuses on Smart Homes, Connected Devices, and how they will improve our lives and society in the future.


SPONSORED

Get Lifetime Access to the Lastest Movies, with Exclusive Offers & Free Express Order Delivery.

The best paddle surf board isn't at Decathlon: it's this one with thousands of accessories and outlet pricing - Grand Goldman

The best paddle surf board isn't at Decathlon: it's this one with thousands of accessories and outlet pricing - Grand Goldman

Even if you keep up a great workout routine all year round, when vacation time comes, we usually tend to slack off and put training aside. A good w...

Read
This is the best time to get cheap, good running shoes: here's why - Grand Goldman

This is the best time to get cheap, good running shoes: here's why - Grand Goldman

Running is an accessible sport and we only need a little time and a good pair of running shoes to get going, which we can find right now at a good ...

Read
Sports sunglasses: which is the best to buy? Tips and recommendations - Grand Goldman

Sports sunglasses: which is the best to buy? Tips and recommendations - Grand Goldman

The sun gives us energy that is vital for our system, but it can also harm us, which is why protection is vital. As Paracelsus said: the dose makes...

Read
The best folding stationary bikes: which one to buy? Tips and recommendations - Grand Goldman

The best folding stationary bikes: which one to buy? Tips and recommendations - Grand Goldman

When looking for a way to stay in shape from the comfort of our own home, few options are better than getting an exercise bike or a recumbent bike ...

Read
Pull-up bar: which one is best to buy? Tips and recommendations - Grand Goldman

Pull-up bar: which one is best to buy? Tips and recommendations - Grand Goldman

Pull-ups are undoubtedly one of the best exercises you can do to train your back and core muscles. Choosing a pull-up bar is not simple, as there a...

Read
Sports headphones: which is the best to buy? Tips and recommendations - Grand Goldman

Sports headphones: which is the best to buy? Tips and recommendations - Grand Goldman

There are times when exercising can get a bit boring and tedious; not every day we are and we need an external stimulus to encourage us to train. ...

Read
Sports Sunglasses: Which Is Best to Buy? Tips and Recommendations - Grand Goldman

Sports Sunglasses: Which Is Best to Buy? Tips and Recommendations - Grand Goldman

The sun provides us with energy that is vital for our system, but at the same time, it can be harmful. As Paracelsus said: the dose makes the poiso...

Read
These are the best thermal bottles to stay hydrated during this heat wave while we train in summer - Grand Goldman

These are the best thermal bottles to stay hydrated during this heat wave while we train in summer - Grand Goldman

We are experiencing one of the toughest weeks of summer, with places in the country reaching nearly 45º, making going outside dangerous, and even m...

Read
Adidas Salomon Reebok: the best deals on running and training shoes on Amazon Prime Day - Grand Goldman

Adidas Salomon Reebok: the best deals on running and training shoes on Amazon Prime Day - Grand Goldman

Finally, the Prime Day 2023 has begun, where we can find great deals on the Amazon website between July 11 and 12. We are sure that sports enthusia...

Read
Adidas, Puma, Reebok: the best deals on running and training shoes on Amazon Prime Day - Grand Goldman

Adidas, Puma, Reebok: the best deals on running and training shoes on Amazon Prime Day - Grand Goldman

Finally, Prime Day 2023 has begun, where we can find great deals on the Amazon website between July 11 and 12. Sports enthusiasts are sure to want ...

Read

ADVERTISEMENT




SPONSORED