Why Burnham’s energy VAT cut will make a difference

Mace Magazine | 25th July 2026 | Comment, Political Consultants
Cameron Brown
Cameron Brown

Cameron Brown, a former special advisor to the Chancellor of the Exchequer, explains why Burnham's VAT cut on energy bills is a measure people will actually notice.

Bar furlough, many of the cost of living measures we’ve seen in recent years have fallen on deaf ears - even the more expensive and impactful ones. Despite our best efforts in the Treasury, where I was a special advisor to the Chancellor during the COVID pandemic, cutting NICs was far less politically appealing than a simple cut to income tax would have been, even though slashing the 'jobs tax' is far more beneficial to low-to-middle income working households. Burnham's VAT cut on energy bills, however, is a measure people will actually notice. The saving is modest, obviously: roughly £4 a month from October. It also scales with consumption, so bigger (wealthier) homes get more cash back in nominal terms than smaller ones - a slightly awkward feature for a measure the government is selling as help for 'those who need it most'. It has a small, positive knock-on for headline inflation too, and - ironically - counts as a post-Brexit win (bar Northern Ireland). None of that nuance survives...

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