UK Prime Minister Andy Burnham Announces Electricity Tax Cut to Ease Cost of Living

Newly appointed UK Prime Minister Andy Burnham has unveiled his first major policy initiative, announcing a reduction in taxes on household electricity bills as part of efforts to ease the country’s ongoing cost-of-living pressures.

The announcement came just a day after Burnham officially took office, replacing Keir Starmer as Prime Minister following a leadership transition. Speaking ahead of his first cabinet meeting on Tuesday, Burnham said the government would remove the 5% Value Added Tax (VAT) on consumer electricity bills from October, a move expected to save the average household around £45 ($61) annually.

The government said the tax cut will initially be funded by scrapping plans to introduce a national digital identity programme. Business Secretary Jonathan Reynolds described the decision as a strong start for the new administration, calling it a significant step toward providing immediate financial relief for British families.

Burnham said his government is determined to give people “some breathing space” as households continue to face rising living costs. Beyond the tax cut, he pledged to rebuild Britain’s industrial base, decentralise power from Westminster, strengthen local communities and work toward ending rough sleeping across the country.

After officially accepting King Charles III’s invitation to form a government at Buckingham Palace, Burnham addressed the nation outside 10 Downing Street, promising to restore political stability and build what he described as “a new political model” capable of driving long-term economic growth.

On the international stage, Burnham wasted no time engaging with world leaders. During his first phone conversation with U.S. President Donald Trump, the two leaders discussed trade, defence cooperation and regional security, including efforts to safeguard shipping through the Strait of Hormuz. Trump described the conversation as productive and expressed confidence in Burnham’s leadership, saying the United States would continue working closely with the United Kingdom.

Burnham also reassured Ukrainian President Volodymyr Zelensky of Britain’s continued support for Ukraine amid the ongoing conflict with Russia. Meanwhile, French President Emmanuel Macron congratulated the new British leader and called for renewed cooperation between the United Kingdom and the European Union.

Domestically, Burnham has already begun reshaping his government by removing several ministers closely associated with his predecessor while promoting allies into key cabinet positions, signalling a clear shift in direction as his administration begins its term.