Energy CEO Reacts As Burnham Scraps VAT On Electricity Bills

Prime Minister Andy Burnham has announced the removal of VAT from household electricity bills from October as part of his first major cost-of-living policy since entering Downing Street, with the government saying the move could save households around £45 per year.

The announcement comes less than 48 hours after Burnham became Prime Minister and follows his pledge to give households greater “breathing space” amid ongoing cost-of-living pressures. It also comes following the appointment of Miatta Fahnbulleh as Secretary of State for Energy Security and Net Zero.

Reacting to the announcement, Lloyd Greenfield, CEO of Glow Green, welcomed the move but said long-term solutions would be needed to deliver lasting reductions in energy costs.

“Any measure that helps reduce pressure on household finances will obviously be welcomed by consumers, particularly at a time when many families continue to feel the impact of higher living costs. Removing VAT from electricity bills represents an immediate saving and delivers on the Prime Minister’s promise to provide some breathing space for households. However, the challenge facing policymakers is how to deliver lower energy costs not just this winter, but for years to come. Short-term support can help families manage rising bills, but long-term affordability will depend on reducing reliance on volatile energy markets and helping households improve how they generate and use energy.”

The government has confirmed the VAT reduction will take effect from October and has described the move as the first step in a wider package of cost-of-living measures. The policy is expected to reduce household electricity bills by an average of £45 per year.

Lloyd Greenfield then identified four areas he believes the new government should prioritise next.

1. Support Household Energy Independence

“More households are looking at ways to take greater control over their energy costs.

“Supporting the adoption of technologies such as solar energy can help reduce reliance on external energy price fluctuations.”

2. Provide Long-Term Certainty Around Low-Carbon Heating

“Consumers are far more likely to invest in energy-saving technologies when they understand the long-term policy direction.

“Certainty and consistency are critical if households are to make informed decisions.”

3. Focus On Lasting Bill Reductions

“The biggest opportunity is helping households permanently reduce the amount they spend on energy.

Policies that improve energy efficiency and encourage smarter energy use can deliver benefits long after short-term support measures have ended.”

The appointment of Miatta Fahnbulleh means responsibility for the government’s energy agenda now sits with one of the key figures tasked with balancing affordability, energy security and the transition to lower-carbon technologies

Lloyd Greenfield concluded:

“The VAT reduction is an important first signal of the government’s intentions on the cost of living. The bigger challenge now is delivering an energy system that provides both affordability and long-term resilience. Households will judge success not only on short-term savings, but on whether energy becomes more affordable and predictable in the years ahead.”