Newly appointed UK Prime Minister Andy Burnham has announced the removal of VAT from household electricity bills as his first major policy initiative. The measure, which takes effect in October, is expected to reduce annual energy costs for households by an average of £45.
The policy is being funded through the cancellation of a £1.8 billion digital ID programme. Chancellor John Healey confirmed the funding strategy as the government convened for its first cabinet meeting at Downing Street.
This announcement coincides with the release of new economic data showing that UK borrowing was lower than anticipated in June. The move has been positioned by the administration as a primary step toward easing the cost of living for the public, receiving support from labor representatives who characterized the action as a necessary response to current economic pressures.
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