Andy Burnham arrived at Number 10 last week and immediately announced he would cut VAT on household electricity to zero, saving British families around forty-five quid a year. This is the policy equivalent of throwing a bucket of water at a house fire while standing outside the building.
The problem, which apparently required a new prime minister to discover, is that UK electricity costs more than it does in most of Europe. Not because of VAT. Because of the actual price of electricity. Burnham’s first cabinet meeting focused on “tackling living costs”—which is political speak for “we have identified that money is expensive.” The VAT cut will arrive in October, by which point the government will have discovered three more reasons why it doesn’t matter.
Why announce a tax cut that saves forty-five pounds annually when the real issue is that wholesale energy costs, infrastructure investment, and market dysfunction are strangling household budgets. Because it’s easy. Because it fits on a press release. Because a new prime minister needs to do something on day one that looks like action without requiring anyone to actually fix anything.
Burnham sacked half his cabinet before lunch and is already facing calls for a snap election. The electricity VAT cut will be law in three months. By then, energy prices will have risen by more than forty-five pounds, the new policy will be invisible, and someone will have already briefed the papers that the real solution involves nuclear plants and American investment. The circle completes itself.