PTI
London
Andy Burnham chaired his first Cabinet meeting as British Prime Minister at 10 Downing Street in London on Tuesday with a promise to lead a “cost-of-living government”, starting with a tax cut to bring down household electricity bills. “We need to be a cost-of-living government, getting that cost of living down, looking at all possible ways of doing that,” Burnham told his top team.
“We are taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope,” he said.
The government said the cost of removing value added tax (VAT) from domestic electricity bills from October 1 will bring down costs, with the policy funded by the cancellation of a scheme proposed by predecessor Keir Starmer.
“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,” said John Healey, newly appointed Chancellor at No. 11 Downing Street.
However, the claim faced instant criticism from one of Starmer’s close aides shunted out of the Cabinet in Monday’s reshuffle.
“But the Digital ID program was unfunded. The government will have to set out how it will pay for its new policies at the Budget,” Darren Jones, former chief secretary to the UK Treasury, posted on social media.
It triggered similar questions from the Opposition Conservatives, who called for Parliament to break its summer recess so the new PM could face scrutiny in the House of Commons over his policies.
But Downing Street insisted that by targeting electricity bills, more people will be supported with rising bills as all suppliers are expected to pass the VAT reduction on to all customers.
Burnham told his Cabinet that he wants to give people “breathing space” and “that little extra sense that help is coming so that they can have that bit of hope that things are getting better”, asking them all to look at ways their departments can help do that.
He said each of the ministers would have to be prepared to “reprioritise” spending and that “difficult decisions” would have to be made financially.
It was largely as a result of domestic energy bills rising since the Russia-Ukraine conflict and exacerbated by the war in Iran that Starmer’s leadership came to an unceremonious end just two years after winning a landslide election for the Labour Party in July 2024.
