What's Going On With the Government's Plan to Cut Energy Bills?

Kemi Badenoch, the leader of the Conservative Party, said on 21 July 2026 that Andy Burnham's plan to cut a tax on energy had "already fallen apart." Her remarks were published by BBC News (BBC News).
Badenoch, who is also the MP for North West Essex, used her account on X (the social media platform formerly known as Twitter) to say she supported the idea of bringing energy costs down. "I welcome action to cut the cost of energy which is too high," she wrote. But she then asked how Burnham would pay for his plans "without putting up taxes or borrowing even more" (@KemiBadenoch on X). Her profile on the platform describes her as Leader of the Conservative Party and MP for North West Essex (@KemiBadenoch).
Andy Burnham became prime minister in July 2026, succeeding Keir Starmer. He has been working on a set of policies to bring down household energy bills. The Guardian reported on 18 July that the Prime Minister was looking at changes to gas standing charges — the daily fee households pay just for being connected to the energy network, before they use any gas or electricity. He was also looking at making heat pumps (a low-carbon alternative to gas boilers) cheaper to run than traditional boilers (The Guardian). The Manchester Evening News reported the same day that the plans could cut energy bills by £130 a year (Manchester Evening News).
The proposals had already attracted criticism before Badenoch spoke. The Telegraph reported on 10 July that Burnham was considering plans for cheaper electricity and gas rates, and noted that the plan raised concerns about tax rises (The Telegraph).
Badenoch's challenge came in two parts: a video remark on the BBC's Politics pages and a post on her official X account. The tax element — VAT, which is a tax added to the price of most things people buy, including energy — seems to be the weakest part of Burnham's plans. Badenoch said it had collapsed before the details could be worked out.
The other parts of the plan, on standing charges and heat pumps, may hold up better politically. That is because they deal with how the energy market is structured, rather than being about a single tax change. Standing charges have been criticised by politicians from several parties. Badenoch was careful to say that energy costs are "too high" before she turned to her question about funding.
The broader context here is that a new Prime Minister is being tested by the leader of the opposition, who is looking for where the government looks weakest. Energy bills are a major political issue across all four nations of the UK. The governments in Scotland, Wales and Northern Ireland run their own energy efficiency schemes, though the rules on energy regulation are set by the UK government in Westminster. Badenoch's choice to focus on how the plans would be paid for, rather than arguing against cheaper bills, suggests the Conservatives want to challenge the government on competence rather than on values.
It is not yet clear from the public record how Burnham's VAT cut was supposed to work in detail, or exactly which part Badenoch meant when she said it had "already fallen apart." The BBC video includes the remark but gives little surrounding detail. The Prime Minister's team has not, in the available sources, published a full response.
Energy policy is one of the few areas where the UK government can act on household costs on its own, without needing agreement from the devolved governments in Scotland, Wales and Northern Ireland. VAT on household fuel is also set by Westminster. Whether the changes to standing charges and heat pumps survive scrutiny from the Treasury — the government department responsible for public spending — and from Badenoch's continued pressure will be an early test of how well the new government can get its laws through Parliament.


