UK PM Burnham to scrap VAT on electricity bills from Oct 1

Prime Minister Andy Burnham has announced his first major policy initiative, a tax cut on domestic electricity bills, as part of a broader effort to address the cost-of-living crisis. The measure, which will remove the value-added tax from electricity bills starting October 1, is expected to save the average household approximately 45 pounds annually.

The Prime Minister, who formally took office on July 21, stated the tax cut would be funded by canceling a previously planned 1.8 billion pound digital ID program. He described the move as providing immediate "breathing space" for families, though he acknowledged it would not fully ease financial pressures. A more comprehensive plan is expected later in the year. Finance Minister John Healey emphasized the government's commitment to fiscal discipline while providing targeted assistance.

The announcement comes amid a backdrop of rising government tax receipts, which have increased concerns about the tax burden on households. Official figures show the government collected 227.7 billion pounds in overall tax and National Insurance contributions between April and June 2026, an increase of 16.6 billion pounds from the same period last...