Burnham's second day on the job: eliminated VAT on electricity bills

Newly appointed British Prime Minister Andy Burnham has taken his second day in office by abolishing the value-added tax (VAT) on electricity bills for households, marking a swift move to ease financial burdens on families. The decision was announced today, with Burnham stating that immediate measures are being introduced to reduce energy costs, bring money into people’s pockets, and restore hope. This follows his first day in office, during which he began implementing his plan to lower living expenses. Burnham, who assumed the role of prime minister yesterday, confirmed that the VAT exemption will take effect by October. The measure is expected to cost the government approximately £850 million this fiscal year, with average households saving around £45 per year. In a statement, Burnham emphasized that these actions are part of broader efforts to support the most vulnerable families, particularly those spending a larger share of their income on electricity bills. The policy aims to alleviate pressure on low-income households, many of whom have been struggling under rising energy prices. The government plans to fund the initiative by withdrawing from a planned digital ID scheme, originally proposed under the previous Labour government led by Sir Keir Starmer. That scheme was estimated to cost taxpayers £1.8 billion. Burnham has also pledged to ease the burden on small businesses, which were hit hard by increased taxes under the previous administration. At the same time, he has committed to maintaining strict fiscal discipline, a stance previously upheld by Starmer. The new prime minister has made clear that economic stability remains a priority, even as he introduces measures aimed at direct relief for citizens. Recent data revealed that the UK government’s debt for June fell more than anticipated, providing a positive outlook for the newly appointed Finance Minister, John Healey. This development is likely to bolster confidence in the new administration’s ability to manage public finances effectively while addressing pressing social concerns. Today, Burnham unveiled several key appointments to his cabinet, including former Defence Secretary Wes Streeting as the new Home Secretary and former Foreign Secretary Ed Miliband as the Foreign Secretary. Other notable names include Shabana Mahmood, who continues as the Justice Secretary, and Angela Rayner, who takes over the Ministry of Housing. Yvette Cooper, the former Health Secretary, will lead the Department of Health, while the Ministry of Housing will be headed by Rayner. The new government is set to hold its first full session of meetings today, as Burnham works to solidify his leadership and implement policies that align with his vision for economic recovery and social welfare. With the VAT exemption on electricity bills now in motion, the focus shifts to how the government will balance fiscal responsibility with the need to provide tangible relief to households facing financial strain.