PM Andy Burnham holds first cabinet meeting and cuts tax

London, United Kingdom

Newly appointed Prime Minister Andy Burnham has begun his premiership by holding his first Cabinet meeting and announcing an immediate move aimed at easing pressure on household finances, with the government confirming plans to remove VAT from domestic electricity bills from October 1. The announcement marks the first major policy decision of Burnham’s government and reflects his pledge to make the cost-of-living crisis a central focus of his administration.

Speaking to ministers during his first Cabinet meeting, Burnham said his government must become a “cost of living government” and focus on delivering practical support for families facing financial pressures. The Prime Minister’s early message has been centred around providing households with what he described as “breathing space” as Britain continues to deal with economic challenges and concerns over everyday expenses.

The headline measure announced by Burnham is the removal of the current 5% VAT charge on household electricity bills. The change is scheduled to come into effect on October 1, with the government saying it is designed to help millions of households ahead of the winter period. Officials said the policy will reduce the amount families pay for electricity and provide direct financial relief as energy costs remain a major concern for consumers.

The government said the tax cut will initially be funded by cancelling the previous administration’s Digital ID programme, which had been estimated at around £1.8 billion. Burnham’s team argued that redirecting those resources toward household bills would provide more immediate support for people struggling with rising living costs.

The first Cabinet meeting also followed significant changes to the government’s senior leadership team. Burnham reshaped the Cabinet after taking office, including appointing John Healey as Chancellor of the Exchequer. The changes represented a clear shift in personnel and policy direction as the new Prime Minister moved quickly to establish his administration’s priorities.

While supporters of the announcement welcomed the electricity tax reduction as an immediate measure that could help households, critics questioned whether the savings would be enough to make a substantial difference and raised concerns about the long-term financial impact of the policy. Analysts have also pointed out that future decisions on wider economic measures will depend on government spending plans and budget assessments.

The move represents an early attempt by Burnham to demonstrate that his government intends to prioritise everyday financial pressures over longer-term political debates. As his administration begins work, the first Cabinet meeting and energy tax cut have set the tone for a premiership focused on household costs, public services, and rebuilding confidence in government action.

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