UK PM Burnham cuts electricity VAT and caps bus fares to ease cost of living
New UK Prime Minister Andy Burnham announced the removal of 5% VAT on domestic electricity bills from October 1, 2026, saving households about £45 annually, funded by scrapping a £1.8 billion digital ID program. He also introduced a £2 cap on single bus fares across England from January 2027, backed by £400 million in public funding. These measures aim to reduce the cost of living, support families, and curb inflation, following a 13% rise in the energy price cap due to global gas price increases.
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New UK Government: Bus Travel to Become Cheaper Next Year
Newly appointed UK Prime Minister Andy Burnham has announced a reduction in the price cap on local bus fares across England, lowering it from £3 to £2 for a one-year period starting January 2027. This is the second measure of his cost-of-living agenda, following the abolition of VAT on household electricity bills for six months. The price cap was originally introduced by the Conservative government in 2023 at £2, then raised to £3 by Burnham's predecessor Keir Starmer in 2025. Burnham stated that affordable transport is a basic necessity and that no one should be excluded due to cost. The reduction will be financed by reallocating planned climate protection investments, with some now recorded as loans rather than expenditures. Burnham took office on Monday, succeeding Starmer, and has promised to give Britons more 'room to breathe.'
UK Prime Minister Andy Burnham Caps Bus Fares at £2 to Ease Cost of Living
UK Prime Minister Andy Burnham announced a £2 cap on single bus fares outside London, effective January 1, 2027, through the end of 2027. The policy, backed by £454 million in public funding, reverses a previous increase to £3 under former Chancellor Rachel Reeves. Burnham, who implemented a similar cap as Mayor of Greater Manchester, stated the measure aims to provide 'breathing space' amid the cost-of-living crisis. Transport Secretary Heidi Alexander said the cut will save travellers a third on fares, improving access to work, school, and healthcare. Funding will come from reprioritising the Department of Energy and Net Zero's climate change budget. The announcement follows other cost-of-living measures, including removing VAT from electricity bills and cutting business rates for hospitality by 20%.
Bus Fares To Be Capped At £2 In Andy Burnham's Latest Bid To Tackle Cost Of Living
New UK Prime Minister Andy Burnham has announced a £2 cap on single bus fares across England, effective January 1 next year. The policy, backed by £400 million in public funding, aims to ease the cost of living crisis and is expected to save millions of travellers a third on their fares. Burnham, who previously implemented a similar cap as Mayor of Greater Manchester, stated that affordable transport is essential and that no one should be priced out of access to opportunities. The announcement was made during a speech at the People's History Museum in Manchester on June 29, 2026.
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UK Labour Government Scraps 5% VAT on Electricity Bills to Ease Energy Costs
In one of his first acts as UK Prime Minister, Andy Burnham announced the new Labour government will remove the 5% value-added tax (VAT) on domestic electricity bills starting October 1. The move aims to help households cope with rising energy costs, particularly after the Ofgem price cap rose 13% in July due to higher wholesale gas prices linked to the Middle East crisis. The tax cut, funded by canceling the £1.8 billion Digital ID program, is expected to save the average household about £45 per year. All suppliers must pass the reduction to customers, including those on fixed tariffs. Small businesses, charities, and residential care homes eligible for reduced VAT rates will also benefit. The government stated the policy will support more people with rising bills and help keep inflation down.
UK's Burnham targets lower energy bills in first move as PM
British Prime Minister Andy Burnham has announced the removal of value-added tax (VAT) from domestic electricity bills, effective October 1. This is his first major policy initiative since taking office. The move is intended to lower energy costs for households and will be funded by savings from the cancellation of a £1.8 billion (US$2.42 billion) digital ID programme. The announcement was made on July 21, 2026, and reported by The Business Times.
UK Prime Minister Andy Burnham Cuts VAT on Electricity Bills to Reduce Cost of Living
New UK Prime Minister Andy Burnham has announced the removal of VAT from electricity bills, effective October 1, as part of his promise to lower the cost of living. The move is expected to reduce the energy price cap by £45. The policy will be funded by scrapping former PM Keir Starmer's digital ID plan, which was projected to cost £1.8 billion over three years. However, the VAT cut itself is estimated to cost around £850 million annually, leading to some confusion over the funding gap. Burnham stated the action will 'put more money in people's pockets and bring back hope.' New Chancellor John Healey said the tax cut will provide families breathing room and help bring down inflation. Burnham is also expected to announce a £2 cap on bus fares the following day.