Prime Minister Andy Burnham has announced a cut to VAT on energy bills, a measure that will reduce average household charges by around £45 a year from October. The move, announced shortly after he took office, is part of his mission to tackle cost-of-living pressures and will apply to nearly every household in the country.
VAT cut on energy bills
The VAT reduction, set to take effect from April, will result in a slight fall in average charges. According to Burnham, this direct action will bring down bills by approximately £45 annually. Critics have noted that this amounts to less than £1 a week, but Burnham argues that a combination of small measures will collectively make a significant difference to the worst-off households.
The measure may also prevent bills from rising further later in the year, providing additional relief. Alongside the energy bill support, Burnham has announced a cap on bus fares and a business rate cut for pubs and other venues.
Prime Minister's response to criticism
Speaking to the BBC, Burnham acknowledged the criticism, saying: "I can accept criticism that this isn't enough, because I wouldn't say it's enough. But I take an approach to politics where I do what I can, when I can. Just take that little bit of pressure off and address an issue that you know needs addressing. It's not the end of the story."
The Prime Minister described his approach as bringing an "accumulation of smaller things" that "combine to take the pressure down" on household budgets. He indicated that further measures are planned as part of a broader strategy.
Chancellor's statement and future plans
Chancellor John Healey commented on the VAT cut, stating: "(This) energy tax cut will give families some breathing room on bills, and provide some reassurance this winter." Voters will learn more about the new Government's tax and spending plans at the October Budget, where additional details are expected to be outlined.
The announcement marks one of the first major policy interventions by the new administration, with the aim of easing financial strain on households across the country. The impact of these measures will be assessed as further policies are introduced.
