Andy Burnham to remove VAT from household electricity bills

tvJul 21, 202615191

Prime Minister Andy Burnham announced that VAT on domestic electricity will be cut from 5% to 0% for six months from October, a move the government says will reduce the average household bill by about £45 a year. The government plans to fund the measure by scrapping the digital ID programme, which the Office for Budget Responsibility had scored at £1.8 billion, but Labour figure Darren Jones said the programme was unfunded and questioned whether savings are actually available. Business Secretary Jonathan Reynolds called the policy simple, deliverable and a way to give people "breathing space," while fuel poverty charity National Energy Action praised the change. Liberal Democrat leader Ed Davey said the cut is welcome but insufficient. The announcement ties the VAT cut explicitly to the new administration's cost of living priorities and replaces the digital ID project as that funding source, a shift that has already prompted parliamentary and media scrutiny.

Fionna O’Leary

@fascinatorfun.bsky.social

Good move to announce the removal of VAT (@5%) on electricity bills, operative 1-10-26. NB NOT gas bills. Another move to start the ratchet of reducing the ratio between gas and electricity, thus reducing the cost risks of installing heat pumps in gas/oil CH homes www.bbc.co.uk/news/live/cg...

618h ago

Fionna O’Leary10

So, on a rough calculation, all electric non heat-pump home currently paying £180 pcm (£2160 pa) will save over £108 a year The same home, if it installed an Air to Air heat pump (good for all electric homes) would likely save a further £1,000 a year on top of that, soon paying for the heat pump

Susan 🐝🐓🪴🌻🇪🇺🇺🇦2

It isn’t targeted and disproportionately benefits those who can afford to change to solar & heat pumps, which requires significant investment up front.

Mark Purchase 🏴󠁧󠁢󠁷󠁬󠁳󠁿 🇪🇸 🇪🇺1

Strangely Spain recently (1 June) returned IVA to 21% on energy bills Even more strangely the price of electricity is still loads cheaper in Spain Cutting VAT isn’t the answer to cheaper energy

Chris Midgley1

The removal of the marginal pricing system for electricity would be welcome. I would happily give up my fifteen year old gas boiler (in perfect working order) and go for an electric boiler (air heat pump not financially viable, house would need re-piping). Just had a 15Kw battery system installed.

PWCoghlan1

Two awkward points arise from the welcome announcement besides separating gas & electricity charges 1. The further prospect of fantasy economics in that no funding was allocated for the scrapped digital ID 2. It's only a matter of time before some obnoxious Tory troll squeaks "Brexit benefit" 🤔

igtbok.bsky.social1

My respect for Darren Jones just fell through the floor. Petulant. The only person he has damaged is himself.

Quoting this

Sustainable Us13

Hmm interesting. I'm all electric, the price cap went up by about 5% for leccy, the removal of VAT means they cancel each other out!

Phil Sturgeon 🌳🚵⚓️13

One good thing. Making electricity cheaper through this move and hopefully others, will help more homeowners to switch from gas to heat pumps. So why the fuck do we need to issue new North Sea oil and gas licences.

The Independent

@the-independent.com

BREAKING: Andy Burnham has told his first cabinet meeting that it needs to be a “cost-of-living government” and help those struggling with high costs. Read more: trib.al/f2di2Ez

203h ago

The Arm1

Good to see that 2 years of Machiavellian tactics and sabotage to get the PM job has landed the UK exactly where we were before he performed his coup-d'etat.

Newbunkle1

Kicking all the landlords and millionaires out of the party would be a start.

The New York Times

@nytimes.com

News Analysis: The UK's new prime minister, Andy Burnham, promised policies that would give average Britons financial “breathing space.” His opponents are already doling out criticism.

243h ago

Barry Howard 🔶h

@barryhow2c.bsky.social

Wealth tax on UK’s super-rich could raise £10bn a year, Andy Burnham told New prime minister urged to introduce 2% minimum charge on households with more than £100m in wealth www.theguardian.com/business/202...

124h ago

Orbinho

@orbinho.bsky.social

My observation on Andy Burnham's first two policy ideas are that removing VAT on electricity bills saves more money for wealthier people with bigger houses more than lower income families and while everyone would agree with ending homelessness, most people aren't going to want to pay for it.

144h ago

Trussell

@trusselluk.bsky.social

🚨 BREAKING: New PM Andy Burnham has scrapped VAT on electricity bills. This is a helpful first step. But for people struggling to afford the essentials, it won't go far enough. The gov promised to end the need for emergency food. Now we need to see longer-term actions to make that a reality.

73h ago

Mohamed A. El-Erian

@elerianm.bsky.social

...the door for more state investment; and The UK’s new Prime Minister cut the VAT on electricity. This is part of the bigger, ongoing phenomenon of markets showing exceptional relative stability in the face of considerable global macro fluidity. #economy #markets #japan #uk 2 of 2

113h ago

Tax Justice UK

@taxjusticeuk.bsky.social

Burnham’s cutting VAT on home electricity bills— it's a good first move, and it’ll help millions who are struggling right now. It's great that he’s cut taxes on ordinary people, without handing another tax break to fossil fuel giants, because they have a tendency...🧵1/8

91h ago

John Lubbock

@jwsal.bsky.social

Andy Burnham should announce a Maoist cultural revolution specifically targeting water company bosses. Labour + 50 points.

124h ago

Martin Baccardax

@mdbaccardax.bsky.social

Andy Burnman's first major policy decision as Prime Minister will save UK familes £45 a year ... or roughly the equivalent of one pint of larger every two months.

44h ago

Anneliese Dodds MP

@anneliesedoddsmp.bsky.social

I'm pleased Andy Burnham has taken immediate action, as Prime Minister, to tackle the cost of energy bills. Good to see this early step towards building the new economic and political settlement our country needs.

34h ago

Gregor Poynton

@gregorpoynton.bsky.social

Removing VAT from household electricity bills is the new Prime Minister's first major cost of living measure, helping families keep more of their money this winter.

35h ago

Nicky2

This is nothing more than an insult to those struggling. I’m not one of them and I have no need for this paltry reduction in my electricity bills. Why waste money giving this to all and sundry when it could all be given to those in most need. Headline grabber. Nothing more.

Ada Loves Lace1

That's just £3.75 a month saving. Food price inflation could wipe that out in a heartbeat.

Gregor Poynton1

From 1 October, the 5% VAT charge on domestic electricity bills will be removed for the rest of this financial year, cutting the annual energy bill by around £45 for the average household.