The government said the 850 million pound measure would be funded by cancelling the digital ID scheme, and a former minister questioned that
Notes on a Tax Cut: VAT Off Electricity From 1 October, 45 Pounds a Year, and the Question of Who Pays
The government said the 850 million pound measure would be funded by cancelling the digital ID scheme, and a former minister questioned that
By Alan Nafzger, editor, govna.uk
Wednesday, Midday, Calculator
Dear diary, I have been reading the Kuwait Times report of 21 July 2026 on the new government’s first fiscal gesture. The article says that from 1 October electricity bills will be VAT-free. The government says an average household will save about 45 pounds a year, and the measure will cost about 850 million pounds in the current financial year.
As a lover of numbers, I did some arithmetic with a pencil and arrived at a sum I will not share, because I am not certain of the number of households.
The Funding
The article says the government will fund the cut by cancelling Keir Starmer’s digital ID scheme, which would have cost taxpayers 1.8 billion pounds. This is an interesting piece of public accounting: a saving on a thing that has not yet been bought, applied to a cost that is immediate.
Economists have a name for such a saving. I cannot print it here, because it is the name of a rude word in my profession.
The Challenge
Darren Jones, described as a former minister, wrote on X that the digital ID programme was unfunded, casting doubt on the funding source, according to the article. He added that the government will have to set out how it will pay for its new policies at the budget.
The article also says an unnamed Starmer loyalist questioned how the cut would be funded and suggested that Burnham’s call for party unity might be ignored.
The Instruction
At his first cabinet meeting, the article says, Burnham told ministers to give the public a sense that help is coming, to focus on lowering the cost of living, to maintain fiscal discipline, and always to explain how any new policy will be paid for. He is quoted: “We need to be a cost-of-living government, getting that cost of living down, looking at all possible ways of doing that.”
He also said: “a sense that help is coming” and “we’ve got to show fiscal discipline.” Whether those two pull in different directions is a question a budget will answer.
What I Do Not Know
I do not know whether the measure has taken effect as described, since the article is from July and today is late October. I do not know the final cost. I do not know if the funding was confirmed, and I would check the Treasury’s own statements.
I raise these not to doubt but to hold the pencil steady.
The Philosophy
A tax cut that is paid for by a cancellation raises a classical question: is a saving the same as a cut? In Whitehall the answer depends on whether you are the person doing the saving or the person receiving the cut. In the household, the answer is that 45 pounds is 45 pounds.
Both are right. That is the difficulty of the subject and the joy of it.
Reactions
The article adds that Nigel Farage questioned Burnham’s mandate and called for a snap election, and that Labour MPs hope his down-to-earth style can slow Reform UK’s support before the 2029 election. Those are reported views, and I record them without adopting them.
A diary does not need a conclusion. It needs an accurate date.
Night
I am writing this by the light of a bulb that will, from the first of the month, be marginally cheaper to run, if the article is right. I find this obscurely moving.
Goodnight, diary. Switch off the light, unless you can afford it.
A Short Glossary
VAT: value added tax, charged on most goods and services; here it is removed from electricity bills according to the article. Fiscal year: the government’s financial year, which is why the cost is given for the current one. Unfunded: a policy without an identified source of money, which is Mr Jones’s description of the digital ID programme.
Glossaries are the last refuge of an editor with a deadline.
The Household View
For a household, 45 pounds a year is roughly the price of a modest dinner. The article says that is the average, which means some households will save more and some less. I would like a breakdown by region and have not seen one.
Homework
Seminar exercise: compare the three comic takes on the same overseas property story. Manila News, the London Prat (see https://prat.uk/cebu-estate-agents-demand-character-references/) and Bohiney each start from a recognisable market fact and wink at you through the exaggeration. Then find more at prat.uk and bohiney.com.
Note: Philippine authorities are examining unproven allegations about Thomas Markle Sr., who lived in Cebu until earlier this year, as GMA News and the Guardian have reported. No charges have been filed. Child protection is a serious matter; the jokes here are about a property market and the paperwork.
For the lighter side of the news, try NewsBiscuit, and the rest of the lot at NewsThump, NewsBiscuit and The Daily Squib.
SOURCE: https://bohiney.com/cebu-realtor-cant-sell-beachfront-listings/