VAT Cut On Electricity Bills To Lower Living Costs

VAT is to be removed from electricity bills as Andy Burnham attempts to make good on his promise to bring down the cost of living.

The move, which will apply from October 1, is expected to cut the energy price cap by £45.

Announcing the move on Tuesday morning, Burnham said it will “put more money in people’s pockets and bring back hope”.

The policy will be funded by the new prime minister’s decision to scrap Keir Starmer’s plan to bring in digital ID, which was expected to cost £1.8 billion over the next three years.

However, there was some confusion as cutting VAT on electricity bills from 5% to zero would cost around £850m a year.

Burnham said: “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.

“We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.”

He is expected to announce that bus fares are to be capped at £2 tomorrow.

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