Burnham, Healey Cut UK Electricity Tax to 0%, Testing Markets With £850 Million Relief
Updated
Updated · CNBC · Jul 21
Burnham, Healey Cut UK Electricity Tax to 0%, Testing Markets With £850 Million Relief
3 articles · Updated · CNBC · Jul 21
Summary
From October 1, Britain will scrap the 5% sales tax on household electricity bills, a move expected to save a typical household about £45 a year and trim inflation by 0.1 percentage points.
The £850 million measure is funded by cancelling Keir Starmer's £1.8 billion digital ID program, giving Burnham an early cost-of-living pledge while avoiding an immediate increase in borrowing.
Markets are now focused on Chancellor John Healey's wider fiscal stance after Burnham signaled flexibility on fiscal rules; gilt yields fell Tuesday, but 10-year and 30-year yields are still up about 19 and 21 basis points over the past month.
That scrutiny reflects deeper pressure on the new government: public debt is around 95% of GDP, businesses say policy costs have risen 72%, and opposition figures say the Autumn Budget may need nearly £5 billion more for defense.