Households across Luton South and South Bedfordshire are set to see their electricity bills fall this winter after the new Prime Minister announced the removal of VAT from domestic electricity bills.
The measure, one of Andy Burnham’s first decisions since entering Downing Street, will take effect from 1 October and is expected to reduce the annual Ofgem energy price cap by around £45.
The government said the move is intended to ease cost of living pressures ahead of winter and will be funded this financial year by cancelling the proposed £1.8 billion Digital ID programme.
Luton South MP Rachel Hopkins welcomed the announcement, saying it would provide immediate support for families in her constituency.
She wrote in a blog post: “Households in Luton South and South Bedfordshire, and across the UK, will benefit from immediate action to help with their electricity bills this winter, new Labour Prime Minister Andy Burnham has announced as one of his first decisions in office.
“This follows the Prime Minister’s commitment to the nation during his first speech on the steps of Downing Street to give people some breathing space and help with the cost of living. I welcome this key announcement and the support it will offer to constituents in Luton South and South Bedfordshire.”
Under the plans, VAT will be removed from domestic electricity bills from 1 October so the change is reflected in the next Ofgem price cap.
The government says the reduction is expected to save the average household around £45 a year. Ministers say this is in addition to around £150 of support already delivered through measures announced in the previous Budget.
Ms Hopkins said the latest announcement demonstrated that the new government was prioritising working people.
She said: “I’m incredibly glad to see our new Prime Minister Andy Burnham and Chancellor John Healey hitting the ground running to deliver the kind of cost-of-living support people in Luton South and South Bedfordshire need.
“This Labour Government is putting working people first and placing our core values at the centre of government.”
The government said further decisions on longer-term energy support and funding will be considered at the next Budget alongside updated forecasts from the Office for Budget Responsibility.
The Luton South MP also welcomed plans to reintroduce the £2 cap on bus fares across England, describing it as another measure that would help working families.
She wrote on social media: “Next up in Andy Burnham’s steps to ease the cost of living is bringing back the £2 bus fare cap across the country!
“I know that getting about for less can make all the difference for working families in Luton South and South Bedfordshire, so I’m very pleased to see this announcement.”
The VAT cut forms part of a package of early measures announced by Prime Minister Andy Burnham, who has pledged to focus on reducing the cost of living, tackling rough sleeping and boosting economic growth across the country.
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