Newly appointed UK Prime Minister Andy Burnham has announced a reduction in value-added tax (VAT) on household electricity bills as one of his first major policies aimed at easing the country’s cost-of-living challenges.
The tax cut, set to take effect in October, will remove the current five percent VAT on consumer electricity bills, saving households an estimated £45 annually. The government said the measure will initially be funded by scrapping plans to introduce digital identity cards.
The announcement came ahead of Burnham’s first cabinet meeting after taking office, where he is expected to outline his administration’s priorities. Business Secretary Jonathan Reynolds described the move as a strong start for the new government.
Burnham said his administration is committed to providing immediate financial relief to families while working toward long-term economic reforms. He also pledged to revive British industry, decentralize power away from Westminster, expand public housing, and tackle homelessness across the country.
After officially becoming prime minister following a meeting with King Charles III, Burnham said Britain must restore stability and build a stronger economy through a new political approach.
The new prime minister has already reshaped his cabinet by removing several ministers from the previous administration, appointing John Healey as finance minister, Ed Miliband as foreign minister, Wes Streeting as defence minister, while Shabana Mahmood retained her role as interior minister.
On the international stage, Burnham held his first phone conversation with US President Donald Trump, with both leaders discussing trade, defence cooperation and future bilateral relations. He also reaffirmed the UK’s continued support for Ukraine during a conversation with President Volodymyr Zelensky, while French President Emmanuel Macron congratulated him and called for closer cooperation between Britain and the European Union.
Burnham outlined plans for a 10-year national strategy focused on economic renewal, stronger public services and regional development. He also promised renewed efforts to end rough sleeping and improve affordability by increasing public investment and strengthening government control over essential services.
His administration, however, faces significant challenges, including sluggish economic growth, rising public debt, increasing welfare costs, irregular migration and volatile global energy markets. Opposition figures have questioned Burnham’s mandate and called for an early general election.
