UK cuts VAT on household electricity bills ahead of new PM's cabinet meeting

Britain’s new Prime Minister, Andy Burnham, has launched a cost‑of‑living relief package that includes a VAT cut on household electricity bills. The move, announced ahead of his first cabinet meeting, is aimed at easing financial pressure on millions of Britons and reassuring markets that the government will take decisive action to curb energy costs.

The policy will effectively remove the 20 % value‑added tax that has traditionally been applied to domestic electricity, reducing the monthly bill for consumers. Burnham said the savings would be financed by scrapping the digital ID scheme introduced by his predecessor, thereby redirecting public funds toward direct consumer relief. FRANCE 24’s Rochelle Ferguson‑Bouyahi reports that the decision was taken after consultations with industry experts and was designed to deliver immediate economic relief while maintaining fiscal responsibility.

The announcement marks a clear shift in the new administration’s approach to energy and welfare policy, signalling a commitment to tangible measures that address everyday costs for households. By tying the VAT cut to the cancellation of the digital ID scheme, Burnham’s government seeks to balance consumer support with a streamlined public‑sector budget.