LONDON: British Prime Minister Andy Burnham said on Tuesday (Jul 21) he would cut taxes on electricity bills in his first attempt to ease a lengthy cost-of-living crisis that has angered the public and helped stoke political instability.In his second day in his new role, Burnham said his government would remove the value-added tax from domestic electricity bills from Oct 1, cutting around £45 from the average annual bill of around £1,862 that households pay.With bond investors watching closely for how any fiscal support would be paid for, he said the move would be funded by savings from the cancellation of a £1.8 billion (US$2.42 billion) digital ID programme, which he announced on Sunday."We're taking immediate action to cut taxes on energy bills, put more money in people's pockets and bring back hope," he said in a statement, having pledged to give people more "breathing space" in their lives.
BURNHAM TRIES TO MOVE QUICKLY TO OFFER SUPPORTThe energy announcement is designed to show that Burnham will move quickly to improve living standards after years of stagnation.But in the first sign his call for unity in the governing Labour Party might fall flat, an ally of former prime minister Keir Starmer, Darren Jones, said the digital ID scheme was unfunded, questioning whether the new leader had the money to cover his policy move on energy bills."The government will have to set out how it will pay for its new policies at the budget," he said on X.Energy bills have been one of the main drivers of Britain's cost-of-living crisis after the wholesale gas price, which heavily influences British electricity prices, surged after Russia's full-scale invasion of Ukraine in 2022.The Conservative government at the time spent billions of pounds to shield households through an energy price guarantee. But while prices eased from mid-2023, they remain up to 60 per cent higher than before the energy crisis. They have also increased in recent months due to the Iran war.The End Fuel Poverty Coalition welcomed the move as a sign of positive intent but added: "It does not address the scale of what households are facing, with millions still left paying an unaffordable share of their income on energy and record levels of energy debt built up over successive winters of high bills."
