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Burnham Names Healey Chancellor; Cuts Electricity VAT to Zero

7/22/2026

28 5 Full Breakdown

Summary

Story summary

Prime Minister Andy Burnham appointed former defence secretary John Healey as chancellor on July 20, 2026.
Healey announced that VAT on electricity will fall from 5% to 0% in October, a move that will cost £850 million.
Healey also scrapped the £1.8 billion Digital ID programme and pledged no hikes to income tax, VAT or national insurance.
After the reshuffle, 10-year gilt yields fell, erasing a 19-basis-point rise from the previous month.

History

Historical Context

In 1997 Labour Chancellor Gordon Brown cut VAT on domestic fuel and power to 5%, the first major reduction since VAT’s 1973 introduction. The move built on earlier swings between 8% and 15% rates under Conservative chancellors and set a benchmark that Prime Minister Andy Burnham’s 2026 appointment of John Healey revived with a proposal to eliminate VAT on electricity.

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Story summary

Prime Minister Andy Burnham appointed former defence secretary John Healey as chancellor on July 20, 2026.
Healey announced that VAT on electricity will fall from 5% to 0% in October, a move that will cost £850 million.
Healey also scrapped the £1.8 billion Digital ID programme and pledged no hikes to income tax, VAT or national insurance.
After the reshuffle, 10-year gilt yields fell, erasing a 19-basis-point rise from the previous month.

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