Healey Unveils £45 VAT Reduction on Energy Bills
John Healey has announced his first tax cut for households since becoming Chancellor of the Exchequer, succeeding Rachel Reeves. The new Labour Party Chancellor confirmed a £45 VAT reduction on electricity bills, set to take effect in October. The measure is funded by cancelling the Digital ID programme, according to Healey.
Chancellor's Statement on Cost of Living
In a statement, Mr Healey said: “For too long, too many people have struggled with the cost of living. Today’s energy tax cut will give families some breathing room on bills, and provide some reassurance this winter. This measure is funded this year from cancelling the Digital ID programme, and it will help bring down inflation while supporting households in every postcode.”
Potential Tiered Energy Bills Under Consideration
Reports indicate that Prime Minister Andy Burnham’s government is considering tiered energy bills, where the government would subsidise a certain amount of “essential” energy, with prices rising for higher usage. Such plans could save average households an estimated £225 per year on energy bills, according to reports.
Political Reactions: Badenoch and Farage Respond
Conservative Party leader Kemi Badenoch warned that unfunded “spending giveaways” will not solve “Britain’s problems.” Speaking at the Farnborough International Airshow, she urged Chancellor Healey to “find the funding” for defence spending to reach 3% of GDP by the end of this Parliament. She added: “I have offered to work with Prime Minister Andy Burnham in the national interest to cut the benefits bill.”
Reform UK leader Nigel Farage criticised Healey’s mandate, stating: “This man has no mandate whatsoever. He didn’t stand on the 2024 general election manifesto. You cannot make the ‘biggest changes’ in British politics in 40 years without a mandate from the British people. And it would be only decent, right and proper to call a general election on that issue and to do it now.”
