New Prime Minister Andy Burnham is set to make a major cost of living announcement on Tuesday, July 21, following his first cabinet meeting and Privy Council attendance. The Labour leader has already initiated a VAT cut on energy bills, with further measures expected.
VAT Cut as First Step
In his inaugural speech outside Number 10 Downing Street on Monday, Burnham pledged to address the cost of living crisis, stating he could "do something to give people some breathing space now." He confirmed that details of the measures, including how they will be funded, would be unveiled on Tuesday. The VAT reduction on energy bills is seen as an immediate relief for households and businesses.
Martin Pibworth, chief executive of SSE, welcomed the move: "Cutting VAT gives immediate relief to homes and businesses and is a very welcome first step to making electricity as cheap as possible." He emphasized the importance of electrifying the economy to leverage cheap renewable power and reduce energy dependence.
Criticism and Calls for Further Action
However, some groups argue that the VAT cut alone is insufficient. Simon Francis, coordinator of the End Fuel Poverty Coalition, said: "Removing VAT from electricity bills is a positive statement of intent by the new administration. But it does not address the scale of what households are facing, with millions still left paying an unaffordable share of their income on energy and record levels of energy debt."
Francis called for enhanced support, including an improved warm home discount, reformed cold weather payments, and an energy debt relief scheme. He stressed that the only long-term solution is to change how energy bills are set, breaking the link between gas and electricity prices and reducing exposure to volatile fossil fuel markets.
Cabinet Meeting and Privy Council
Burnham's day began with attendance at the Privy Council, an advisory body to the King, where he swore the oath of office. He then returned to Downing Street to chair his first cabinet meeting. The Prime Minister is expected to outline a comprehensive plan to tackle the cost of living, which has been a key issue for voters.
The announcement comes amid ongoing economic pressures, with energy bills remaining high and household debt at record levels. Burnham's government is under pressure to deliver meaningful relief while maintaining fiscal responsibility.
