ANDY Burnham has announced that he will scrap VAT from domestic energy bills.
The cut will come into place from October 1 and has been funded by the axing of digital IDs.
John Healey was appointed chancellor yesterday in a surprising move Credit: Reuters
Andy Burnham arrives at 10 Downing Street as prime minister for the first time yesterday Credit: Crown Copyright
The measure will cost £850million and currently is only funded for one year.
The estimated £42 saving will apply to every household regardless of wealth.
The brand new PM 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.”
Chancellor John Healey MP added: “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.
“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.”
All suppliers are expected to pass on the cut to their customers – including those on fixed tariffs.
The reduction will be extended to small businesses who qualify for domestic energy alongside eligible charities and residential care homes.
The cancellation of the digital ID programme is estimated to free up £1.8bn which Mr Burnham hopes to use to help with the cost of living.
During his first speech as prime minister yesterday Mr Burnham said he “can do something to give people some breathing space now”.
Eze Chidiebere Paul
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