HOUSEHOLDS in Colchester are set to benefit from immediate government action to cut energy bills.
The Labour government has announced a new tax cut which will scrap VAT from domestic electricity bills from October 1, offering residents some relief ahead of the winter price cap.
The decision will take effect before the next Ofgem price cap and is fully funded for the current financial year through the cancellation of a £1.8 billion Digital ID programme.
Pam Cox, Labour MP for Colchester, said: 'This tax cut will have a real impact on finances for households in Colchester.
'Energy bills are one of the big costs facing everyone in Colchester and this will have a meaningful impact in the months ahead.
'This is a measure from the new Prime Minister than demonstrates we can do more to ease the cost of living for the country.'
Prime minister Andy Burnham said: 'Westminster has not been working for people for too long, with families struggling with the cost of living.
'That needs to change.
'I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as prime minister.'
Chancellor of the Exchequer John Healey said: 'For too long, too many people have struggled with the cost of living.
'Today’s energy tax cut will give families some breathing room on bills and provide some reassurance this winter.'
The VAT cut is expected to take around £45 off the yearly Ofgem price cap in October.
All energy suppliers are expected to pass the full VAT reduction on to customers.
Small businesses qualifying for domestic VAT relief and not VAT-registered, as well as charities and residential care homes eligible for the reduced rate, will also benefit.
