British Prime Minister Andy Burnham said yesterday he would cut taxes on electricity bills, the first of several early moves to signal his intent to ease cost-of-living pressures and quell anger over successive governments’ failure to bring change.
On his second day in his new job, Burnham said his government would remove the value-added tax from domestic electricity bills from October 1, cutting around £45 from the average annual bill of around £1,862 ($2,490) 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 digital ID programme, announced on Sunday.
Burnham, a 56-year-old former Greater Manchester mayor, wants to move quickly to show people he is “serious about helping them out”. He said on Monday his early policies might not “take all of the pressure off” people struggling with rising prices and that a longer-term plan would be set out later in the year.
But his calls for the governing Labour Party to get behind his agenda might have fallen on deaf ears.
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,” Jones said on X. Markets are listening keenly to how Burnham and his unexpected pick for finance minister, the former defence secretary John Healey, plan to finance the support, after borrowing costs rose on Monday.
At his first cabinet meeting of top ministers, Burnham again stressed that fiscal discipline was the touchstone for his new government as was a push to make life more affordable.
Burnham has said he will unveil more early policies, telling reporters on Monday he wanted his new government “to do some things that people will feel and feel quite quickly”, especially those on the lowest incomes. It is a strategy he hopes can win back voters to Labour and fight a challenge from the populist Reform UK, led by Brexit campaigner Nigel Farage.
Dubbed the “King of the North” for his dogged defence of Greater Manchester, Burnham is the most popular leader of Britain’s main political parties, for now.
But Britain’s revolving door of prime ministers over the past decade has underlined how quickly parties can move against leaders who are not seen as delivering for voters. To ease pressures on families, he is also expected to look at possible caps to bus fares – something he did in Manchester – and other measures, to back up his assertion that “I will put the care of people at the heart of everything I do”.
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