NewsPoliticsAndy BurnhamLIVEUpdated 5 mins agoAndy Burnham promised to deliver 'breathing space' for families during his maiden speech outside No 10, and has already helped millions of families in the UK by abolishing VAT on electricity billsAndy Burnham made the bold VAT move with his new Chancellor, John Healey(Image: Simon Dawson / No 10 Downing Street)Andy Burnham has wasted no time in offering up potential solutions to the cost of living crisis, announcing on his second day in office that he will "bring back hope" for struggling families by cutting VAT on energy bills.Burnham has started making good on his promise for “breathing space” for struggling households, a key plinth of his economic plans unveiled in his maiden speech outside No 10 on Monday. The move will see VAT removed from domestic electricity bills from October 1.Burnham said: “Westminster has not been working for people for too long, with families struggling with the cost of living. That needs to change. I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as Prime Minister. We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.”It is estimated that the change will reduce the annual Ofgem price cap by around £45 from October, with companies expected to pass the reduction onto customers.Chancellor John 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". He continued: “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.”The fully priced plan from Mr Healey comes as Burnham continues to pad out his cabinet, with a number of key appointments made since yesterday, including Ed Miliband receiving the FCDO brief, Angela Rayner returning as Housing Secretary, and Shabana Mahmood staying on as Home Secretary.View PostToday08:19 BSTStarmer Cabinet minister points out VAT funding promise issueThe Mirror's Deputy Political Editor Ashley Cowburn writes in...One former Cabinet minister has already pointed out an issue with the VAT cut funding.Unveiled by Andy Burnham’s new government at 6am on Tuesday, Downing Street said it would slash the average bill by £45 by the autumn. And they said the £850 million cost in 2026-2027 would be funded by abandoning Keir Starmer’s (already scaled back) £1.8billion Digital ID programme.But just hours later Darren Jones - who was sacked as Chief Secretary to the Prime Minister yesterday - suggested the funding was not as straight forward.He said: “Good news that VAT will be cut on electricity bills. It’s a simple way for families to save a few quid, and to mechanically help to keep inflation that little bit lower. But the DigitalID program was unfunded. The government will have to set out how it will pay for its new policies at the Budget.”Darren Jones arrives at Downing Street(Image: Getty Images)Today08:16 BSTVAT cut benefit for 'everyone' Reynolds says as he's pressed on moveThe business secretary, continuing on the media rounds this morning, told the BBC the VAT decision would benefit "everyone", and signalled a strong desire to return to a "simple, straightforward, deliverable" policy understood by all.He was pushed on the £45 figure, given it is only in place for six months, and added that the Government was basing the sum off the additional energy used during the winter. He concluded the focus on electricity bills was the "biggest difference to people that we can make".Jonathan Reynolds has been pushed on the VAT move(Image: WIktor Szymanowicz/NurPhoto/Shutterstock)Today07:57 BSTBurnham VAT move to cut £45 from household bills - and is funded until end of financial yearJohnathan Reynolds, Burnham's newly-minted business secretary, has said the PM's VAT move is funded until "the end of the financial year", with anything beyond then needing to be included in his boss' first Budget.He added that funding for the policy has come from the Government's decision to scrap digital IDs, adding the £45 saving would be "on average", and "additional" for households alongside a £150 saving. Reynolds, who said he does not "anticipate any problems" with the move, added that he expects energy providers to be "very responsive".‌Today07:57 BSTEarly boost for Andy Burnham as figures shows big fall in government borrowingAndy Burnham and his new Chancellor, John Healey, got an early boost as official figures revealed government borrowing dropped by a third in June.The Office for National Statistics (ONS) said borrowing – the difference between what the government rakes in from taxes and spends - stood at £16billion last month, down £7.9billion on June last year. It was also £300million below the Office for Budget Responsibility’s forecast.The welcome fall was largely because of lower inflation-linked debt interest costs, the ONS said.Former defence secretary Mr Healey, whose appointment as Chancellor by new PM Andy Burnham came as a surprise, said: “The Prime Minister and I have talked about how we will work in lockstep to meet the fiscal rules with a buffer against uncertainty and how we’ll make life more affordable for working people right across the UK…‌