The UK's cost of living crisis has long been a pressing concern, with families struggling to make ends meet amidst soaring energy prices. Today, Prime Minister Andy Burnham made a significant move to address this issue, announcing an £850 million tax cut on electricity bills that will see the average household save around £45 annually from October.
The funding for this substantial tax reduction will come from the cancellation of the previous government's digital ID scheme, which had an estimated cost of £1.8 billion over three years. Chancellor John Healey highlighted the policy's dual benefits, stating it would both combat inflation and offer support to families across the country. Critics, however, argue that this move falls short in addressing the full extent of the crisis.
Liberal Democrat leader Ed Davey has suggested that while the announcement is a welcome step, more needs to be done to tackle the root causes of the cost of living problem. Furthermore, Darren Jones, former Chief Secretary to the Treasury under Keir Starmer and a prominent figure in the newly reshuffled Cabinet, has raised concerns about the financial implications of cancelling the digital ID scheme. In an X post, he disputed Downing Street's claim that the programme was funded, suggesting instead that the government will need to outline its budget plans for new policies.
Today's announcement comes as Prime Minister Burnham prepares for his first Cabinet meeting, following a significant reshuffle yesterday that saw several prominent figures from the previous administration removed. The newly appointed ministers include John Healey as Chancellor, Ed Miliband as Foreign Secretary, and Shabana Mahmood as Home Secretary. Angela Rayner takes on the role of Housing Secretary, while Yvette Cooper is appointed Health Secretary. The Cabinet shake-up and this initial policy move signal a clear direction for Burnham's premiership.