Britain’s new Prime Minister Andy Burnham launched his plans on Tuesday to lower the cost of living for millions of Britons with plans to scrap taxes on household electricity bills.
The Labor leader, who took over as prime minister on Monday, said VAT will be scrapped from October, a policy that will cost the government about 850 million pounds in the current financial year.
“We are taking immediate action to cut energy taxes to put more money in people’s pockets and restore hope,” Burnham said in a statement.
The government says the measure will save the average household bill around £45 a year.
It added: “This change supports the poorest households, who spend a higher proportion of their income on energy bills.”
The start date of the measure coincides with the UK energy regulator’s expected increase in electricity and gas price caps due to the US-Iran war.
The government said the tax cuts would be funded by scrapping former Prime Minister Keir Starmer’s digital identity scheme, which would have cost taxpayers £1.8bn.
The new Prime Minister says he wants to ease the pressure on small businesses hit by tax hikes by the previous Labor government.
At the same time, Burnham pledged to adhere to the strict fiscal discipline under Starmer, in which the government balances tax revenue with day-to-day state spending.
-“Fiscal Control”-
UK government borrowing fell more than expected in June, official data showed on Tuesday, providing a boost to new finance minister John Healey, who succeeds Rachel Reeves.
Public sector net borrowing was 16 billion pounds in June, down a third from a year earlier, the Office for National Statistics said in a statement.
However, the ONS warned that “debt remains high by historical standards, approaching the annual value of the entire UK economy”.
Responding to the figures, Healey said “fiscal control is the first responsibility of any” finance minister.
“Fiscal credibility is the cornerstone of economic stability and national security.”
Healey increased the pressure on Starmer last month when he announced his resignation as defense secretary in a sharp criticism of the government’s defense budget and the Treasury, which he will now oversee.
– Stable UK market –
British markets were largely steady on Tuesday, with some signs of unease ahead of Healey’s appointment as chancellor.
British government bond rates rose on Monday after Burnham told British media that the government’s balanced budget rules may allow for some “flexibility.”
Healey added: “The Prime Minister and I have discussed how we will work in lockstep to meet the fiscal rules while buffering against uncertainty, and how we will make life more affordable for working people across the UK.”
Separate official data on Tuesday showed that the UK unemployment rate remained unchanged at 4.9%.
Burnham’s long-term aim was the “re-industrialization” of Britain and large-scale council housing construction.
Although the UK economy has failed to take off since Labor returned to power two years ago, the International Monetary Fund predicts that Britain will perform better than other major economies this year.
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This article was generated from automated news agency feeds without modifications to the text.
