Andy Burnham has announced that one of his first policies as the UK's new Prime Minister will be to cut VAT, or value added tax, on energy bills this winter.
From the start of October, households across England, Scotland and Wales will pay no VAT on their electricity bills for six months, reducing the cost of power during the winter period when demand for heating and electricity reaches its highest point.
The move is expected to cut around £45 (US$60) from the annual bill of the average household, based on Ofgem's current price cap. All in, the policy is expected to cost the Treasury around £850m (US$1.1bn) this financial year.
The measure should provide immediate relief to consumers struggling with energy bills, the cost of which has been inflated by two global energy crises in the past four years.
Burnham described the policy as a way of putting "more money in people's pockets", while Business Secretary Jonathan Reynolds said it would give households some much-needed "breathing space" ahead of winter.
