Andy Burnham unveils VAT cut on electricity bills in first cost-of-living pledge

UK Prime Minister Andy Burnham announced a reduction in electricity bills by an average of £45 on his second day in office, effective from October, marking a significant move to ease the cost-of-living crisis.

On Tuesday, the new prime minister announced that he was executing an immediate tax cut to help ease the cost-of-living pressures for households in Britain.

This move comes a day after Burnham took over the role of prime minister, committed to giving voters some breathing space on living expenses.

In this connection, Burnham said in a statement: “I said I wanted to give people breathing space and that's what I am announcing on my second day as prime minister.

“We’re taking immediate action to cut taxes on energy bills put more money in people’s pockets and bring back hope, he continued."

Burnham became Prime Minister on Monday with a vow to restore optimism to Westminster politics by mitigating the cost of living and ending street homelessness. 

He astounded many in Westminster with his choice of Healey as Chancellor following the intense policy advocacy of both Ed Miliband and Shabana Mahmood.

According to Downing Street, the significant move would remove about £45 from the annual price-capped electricity bill at a cost of £850m in 2026-27. This strategy is expected to drive sales of electric heat pumps for gas boilers by narrowing the price gap between gas and electricity prices.

Consumers in Northern Ireland will continue paying the tax as the region complies with commitments to follow EU tax laws. Furthermore, the government said it would give the Northern Ireland Executive an equal amount of financial allocation to spend on a cost-of-living package of its own.