Andy Burnham Considers Energy Reform to Cut Household Bills

Andy Burnham, the new Labour leader and incoming Prime Minister, is evaluating a radical energy reform package designed to lower average household bills by £130 annually. Developed by the thinktank Nesta, the proposal seeks to make electric heat pumps more affordable than gas boilers by reducing VAT on electricity and shifting renewable energy levies into general taxation.

The plan includes reforming gas standing charges to move costs from low-income households to higher-energy users and canceling £2.7bn in consumer electricity debt for roughly 2 million households. These measures would cost taxpayers approximately £3.2bn per year, a sum likely to be funded through tax increases in the autumn budget.

These proposals arrive as energy price caps increased by 13% in July, with further winter rises expected due to conflict in the Middle East. The initiative aims to address legacy policy costs that have historically made clean heating options more expensive for consumers.