Andy Burnham home EV VAT falls from 5% to zero on 1 October, with the government saying the cut will trim household electricity bills and save a typical household about £45 a year. Jonathan Reynolds said the change should give people “breathing space”.
The reduction applies to household customers in England, Scotland and Wales, and suppliers have been told it should also be passed on to fixed-tariff customers. The government said the cut will cost £850m this financial year and will be funded by savings from cancelling the Digital ID programme.
Darren Jones on Monday
On Monday, Darren Jones was sacked as chief secretary to the prime minister and then wrote on X that the policy was “good” but that “the government will have to set out how it will pay for its new policies at the budget”. His criticism went to the centre of the funding case behind the VAT cut.
Mel Stride also attacked the financing. He said, “The cuts to the Digital ID card budget are not real because the money was never provided in the first place,” and added, “We are only one day in and already it is smoke and mirrors on the public finances.”
England, Scotland and Wales
Jonathan Reynolds said on the that the policy was a “straightforward switch spend” and that the funding ran to “the end of the financial year” in March 2027. The government said that equivalent funding would be given to Northern Ireland, where EU rules limit the range of goods that can be sold without VAT.
That leaves the main practical question in place for households: the cut starts on 1 October, but the funding only runs to March 2027 as stated by Reynolds. Any change beyond that point would have to be set out in the Budget.
