Burnham Removes VAT from Electricity Bills in First Major Cost‑of‑Living Move

Tuesday, July 21, 2026

Government says VAT removal will give households immediate breathing space this winter

In a decisive move to ease the cost-of-living pressures facing millions, Andy Burnham has announced the removal of VAT from electricity bills. According to a government statement, this measure will provide immediate relief of around £45 annually for the average household, on top of previous reductions.

The funding for this initiative will come from the scrapping of the digital ID scheme, a project championed by Keir Starmer but rejected outright by Burnham. The newly appointed Chancellor, John Healey, has assured that this policy aligns with existing spending rules and will offer tangible relief to families.

Click below for the full report from Good Morning Britain.

Burnham’s first act in office is seen as a direct contrast to Starmer’s approach, signalling a shift toward immediate, visible support for households. While the £45 reduction won't solve every challenge, as Burnham admits, it sets the tone for a government focused on alleviating financial strain.

Andy Burnham is the Seventh UK Prime Minister in the past ten years, following most recent, Rishi Sunak and Keir Starmer, and has positioned himself as a leader focused on rapid, tangible support for households.

Critics are skeptical about whether this funding model is sustainable and what further cuts might be necessary. However, the Burnham administration insists that each measure will be fully funded, either through spending adjustments or alternative revenue streams.

Source: Good Morning Britain