Prime Minister Andy Burnham has pledged to assist in alleviating the financial burden on millions of Britons. During his inaugural address as PM, he committed to providing individuals with more financial flexibility. So far, what specific assistance has he announced?
Starting this October, Value Added Tax (VAT) will be reduced from electricity bills for a period of six months, with the government estimating that this move will save the average household approximately £45. However, despite this temporary relief, energy bills are projected to increase again in the upcoming winter, potentially offsetting any savings realized from the VAT cut. The regulatory price cap set by Ofgem recently increased by around 13% and is scheduled for another update in October.
Currently, VAT is levied at a rate of 5%, and suppliers typically transfer this cost to consumers. The Prime Minister emphasized, “I committed to offering financial relief to individuals, and that’s precisely what I’m declaring on my second day in office. We are promptly reducing taxes on energy bills to bolster people’s finances and restore optimism.”
In another initiative, a £2 cap on bus fares will be reintroduced in January 2027 and will remain in effect throughout the year. Previously, a £2 cap was in place between January 2023 and December 2024 under the Conservative government, but the incoming Labour administration raised it to £3, citing affordability concerns.
Mr. Burnham stated, “Accessible and cost-effective transportation links are indispensable. No one should be excluded due to high fares. For too long, people have been told that cheaper transport options are unfeasible. I reject that notion. Just as I have done before, I am now implementing a £2 cap on bus fares for millions nationwide. Lower fares will facilitate people’s mobility, offering them financial breathing space in coping with the cost of living.”
Furthermore, business rates for pubs, clubs, and live music venues across England will be decreased by 20% from April next year. This reduction, in addition to a previously announced 15% cut in January, will benefit around 32,000 hospitality establishments. While this initiative is projected to save an average pub approximately £1,100 annually, the largest live music venues will not qualify for the discount.
The Prime Minister expressed, “I am granting a 20% reduction in business rates to thousands of pubs, clubs, and music venues. I refuse to stand idly by as these beloved local establishments disappear, replaced by boarded-up windows and ‘For Sale’ signs. They form the heartbeat of our communities, and it is time we show our support for them.”
