Aysu Biçer
21 July 2026•Update: 21 July 2026
On his first full day as Britain’s new prime minister, Andy Burnham on Tuesday made his inaugural major policy move, announcing plans to zero out VAT on electricity bills from 5% to nothing.
The government says the measure will be funded by scrapping the digital ID scheme of Keir Starmer, his predecessor.
The new business secretary, Jonathan Reynolds, positioned the move as helping people facing a tough economy, saying it would give them some "breathing space."
However, former Minister for Intergovernmental Relations Darren Jones questioned how the policy would be paid for, arguing the ID scheme was "unfunded" and calling on Cabinet secretaries to set out how they will pay for new policies.
Asked whether savings had been identified from ending the digital ID scheme, Reynolds told the BBC "they would have had to have been," describing the decision as "a legitimate decision."
The announcement came ahead of the first meeting of the new Cabinet, after Burnham became prime minister on Monday.
John Healey has been appointed chancellor of the exchequer (Treasury secretary), with Ed Miliband as foreign secretary and Wes Streeting as defense secretary.
Angela Rayner has returned to her former role as housing secretary, while Shabana Mahmood remains home secretary.
