- New Prime Minister takes immediate action to cut taxes on electricity bills to give households in Dudley breathing space this winter.
- In one of his first acts as Prime Minister, Andy Burnham promises to “put more money in people’s pockets and bring back hope”.
Households across Dudley will benefit from immediate action to help with their electricity bills this winter, Labour’s new Prime Minister has announced as one of his first decisions in office.
This follows Andy Burnham’s commitment to the nation on the steps of Downing Street to give people some breathing space and help with the cost of living.
Dudley MP Sonia Kumar has welcomed the announcement, saying it will provide welcome relief for families across the constituency.
The Labour Government is tackling rising bills with a tax cut to remove VAT from domestic electricity bills from 1 October, in time to impact the next Ofgem price cap. This immediate action applies and is fully funded for this financial year.
Any further action, including longer-term funding arrangements, will be considered at the Budget alongside an OBR forecast. All decisions will continue to be fully funded and consistent with the Government’s fiscal rules.
Prime Minister Andy Burnham 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.”
Sonia Kumar MP said: “Families across Dudley have faced years of rising energy bills, and many are still feeling the pressure on household budgets. Cutting VAT on electricity bills will provide welcome relief this winter and put money back into people’s pockets when they need it most.
“This is another example of a Labour Government taking practical action to help working people with the cost of living. From reducing energy bills to supporting families and investing in our public services, we’re delivering real help for communities like Dudley.”
Cutting VAT on electricity bills is expected to reduce the annual Ofgem price cap by around £45 from October. This is on top of the £150 removed from bills at the last Budget.
By targeting electricity bills, more households will receive support with rising costs while helping to keep inflation down.
The Government expects all suppliers to pass the VAT reduction on to customers, including those on fixed tariffs, as they did following the £150 reduction announced at the last Budget.
Small businesses that qualify for domestic energy VAT relief and are not VAT registered, together with eligible charities and residential care homes, will also benefit.
Chancellor John Healey MP said: “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.”
As part of the Government’s commitment to bring back hope to Britain, the change particularly benefits lower-income households, who spend a higher proportion of their income on energy bills.
Energy bills have risen since Russia’s invasion of Ukraine and have been further affected by instability in the Middle East. The Government says households need support now, which is why it has acted to provide immediate breathing space for millions of people.
The Northern Ireland Executive will receive comparable funding to enable it to support households with the cost of living, ensuring families across the UK benefit.
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