London: The UK’s new Prime Minister Andy Burnham is gearing up to cut household electricity bills by eliminating value-added tax (VAT) on domestic electricity consumption, while canceling a controversial 1.8 billion pound digital ID program in one of his first major policy decisions.
Andy Burnham’s government will remove the 5 per cent VAT charged on household electricity bills from 1st October 2026 as per a Downing Street statement issued on 21st July. This move of British government is likely to help a typical household save around 45 Pounds a year.
This step will give Andy Burnham an early opportunity to draw clear political contrast with the previous government, abandoning a contentious policy while directing the savings towards immediate relief for households in the cost of living.
Burnham said, “Westminster has not been working for people for too long, with families struggling with the cost of living.”
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Digital ID scheme scrapped
Burnham’s office had earlier stated that scrapping the government’s planned digital ID scheme would be among his first moves after taking office.
The program was designed to require all employees to hold a digital ID document. The government had presented it partly as a tool to tackle illegal migration.
The digital ID scheme faced opposition and criticism from across the political spectrum and was described as a “fiasco” by a cross-party committee of lawmakers.
The newly formed British government stated that scrapping this program would help fund the electricity tax cut. This step is likely to cost around 850 million Pounds during the current financial year.
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