New Facts: Burnham removes VAT from electricity bills

On July 21, 2026, Andy Burnham chaired his first Cabinet meeting as UK prime minister and vowed to lead a "cost-of-living government." He announced that VAT will be removed from household electricity bills starting October 1.

The move scraps value-added tax, a sales tax, from domestic electricity to cut what people pay on their power bills. Reports cast it as Burnham’s first step to lower energy costs.

How to pay for it became a flashpoint. Burnham defended the plan as opponents pressed him on funding, according to AOL and TVC News, and the Guardian said he is already under pressure to explain the money. Chancellor John Healey said the cut would be funded by cancelling a planned digital ID scheme, Inkl reported.

The announcement landed amid a worsening squeeze, with a charity telling Inkl that a record number of households cannot afford basics like food, toiletries, and heating. El Constitucional called the VAT removal an immediate reduction for households while noting doubts about its scope and financing.

Burnham also instructed ministers to prioritize measures to bring down living costs, BBC and Gulf Times reported. The electricity VAT removal is scheduled to take effect on October 1.

AI-synthesized from multiple reported sources