SerpApi.Org
A close ally of Keir Starmer who was sacked by Andy Burnham on his first day as prime minister has hit out as his decision to cut VAT from electricity bills.
Darren Jones, who was chief secretary to the prime minister in Starmer’s cabinet, said the policy was “unfunded”.
Burnham announced on Tuesday morning that VAT on electricity bills would be reduced from 5% to zero from October 1, saving householders around £45 a year.
He said the £850 million cost of the policy would be covered by his decision to axe Starmer’s digital ID scheme.
According to the Office for Budget responsibility, that project was due to cost £1.8 billion over three years.
But in a post on X, Jones, who was responsible for promoting the digital ID scheme, said: “Good news that VAT will be cut on electricity bills. It’s a simple way for families to save a few quid, and to mechanically help to keep inflation that little bit lower.
“But the Digital ID program was unfunded. The government will have to set out how it will pay for its new policies at the Budget.”
A source close to Burnham said the proposed cost of digital ID was “in government spending” and therefor was not unfunded.
In a post on X, shadow chancellor Mel Stride said: “It’s falling apart already. Labour say they will fund a VAT cut to energy bills by scrapping their proposed digital ID cards. But the cuts to the digital ID card budget are not real because the money was never provided for in the first place.
“As the OBR stated in November last year, the annual £600 million cost was unfunded as the government was relying on absorbing the provisional spend across departments without specifying where the savings would be made.
“We are only one day in and already Labour are playing fast and loose with the public finances. Labour should be doing what the Conservatives called for months ago – taking VAT off energy bills in a fully funded way by scrapping net zero subsidies.”
Listen to Commons People, the podcast that makes politics easy. Every week, Kevin Schofield and Kate Nicholson unpack the week’s biggest stories to keep you informed. Join us for straightforward analysis of what’s going on at Westminster.
