UK PM Burnham removes VAT on electricity bills from Oct 1

Published Jul 21, 05:08 AM UTC

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.