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Andy Burnham’s VAT Cut on Electricity Bills Marks First Major Policy Shift

New Prime Minister Andy Burnham announces a VAT reduction on electricity bills, funded by cancelling the Digital ID programme.

Editorial Desk

July 21, 2026 One Min Read

POLICY WIRE — London, UK — In a significant policy announcement, newly appointed Prime Minister Andy Burnham has revealed a reduction in VAT on electricity bills. This move aims to provide immediate relief to households grappling with the cost of living crisis.

Chancellor John Healey confirmed that the funding for this VAT cut will come from the cancellation of Keir Starmer’s contentious Digital ID programme. “This decision underscores our commitment to easing the financial burden on British families,” Healey stated.

The Digital ID initiative, proposed by Starmer, faced widespread criticism — and opposition from various sectors. Its cancellation now paves the way for this tax relief measure, which is expected to have a notable impact on household expenses.

This policy shift marks one of the first major announcements under Burnham’s administration, signaling a potential change in economic strategy aimed at addressing immediate consumer needs.

Reporting by Policy-Wire (PW)

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