British Prime Minister Andy Burnham announced this Friday the abolition of 5% VAT on household electricity bills from October 1st, in his first major intervention in cost-of-living matters since taking power.
Downing Street stressed that this reduction in taxation will be temporary and aims to alleviate the financial pressure on households, who are seeing energy bills soaring.
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It is estimated that the move will cost the average home 45 a year and will be financed by abandoning the executive’s planned 1.8 billion pounds for a digital ID programme, which Burnham had openly opposed during the elections.
“The policy is a clear sign that my administration is committed to improving the lives of the British people, who continue to face considerable pressures as a result of the cost-of-living crisis,” the Prime Minister said, adding that the aim was to continue the cost-of-living plan he initiated when he entered Number 10.
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“We are cutting this bill at a time when many families are still struggling to keep up with high energy prices.
While we are ensuring financial discipline, we are re-prioritising spending to help households,” explained the Chancellor of the Exchequer, John Healey. Supporters of the measure praised the move, but other economists wondered if this measure would really make a difference in the face of such high bills.
