Prime Minister Andy Burnham has revealed his plan to “bring back hope” for families struggling with cost of living as he announced announced a tax cut for household electricity bills.
The Government said on Tuesday it would remove VAT from domestic electricity bills from October 1, adding the measure will be funded by savings from the cancelled digital ID programme.
Mr 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 suppliers expected to pass savings on to their 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.”
