Sir Keir Starmer's former chief secretary Darren Jones has questioned how Andy Burnham's proposed VAT cut would be paid for just 12 hours after being sacked from Cabinet.
Mr Burnham yesterday announced widespread cuts to VAT on energy bills for households from October 1 – funded by the controversial digital ID scheme introduced under Sir Keir.
However, in a post on X, Mr Jones 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 programme was unfunded. The government will have to set out how it will pay for its new policies at the budget."
Justifying the move to alleviate the cost of living, newly appointed Chancellor John Healey said the VAT cuts "will give families some breathing room on bills and provide some reassurance this winter".
Speaking to Times Radio, Shadow Defence Secretary James Cartlidge said the Office for Budget Responsibility confirmed last year the digital ID card scheme has not been funded.
He said: “They literally said that, so you can’t fund a tax cut with savings from a programme that itself wasn’t funded.
“So you know, big question here, backed up by someone who was only recently in the heart of government under Labour – so it’s a fairly extraordinary position.
"I certainly agree with the new Prime Minister that cost of living is a big issue; I think we all agree with that. It's still the number one thing that comes up on the doorstep with my constituents.
“But if you’re going to have policies to deal with it, they’ve got to last more than a few minutes in terms of scrutiny, to be honest.”
Since the controversy, Mr Burnham vowed to always “show how we’re going to pay” for policies at his first Cabinet meeting today, telling his colleagues “we will seek to do more” with plans to be set out “over the coming days”.
He added: “But always we will show how we are going to pay for it, what we are reprioritising. That will be a theme that we will always come back to.”
Tory leader Kemi Badenoch echoed concern and said: “It’s only one day into Burnham’s Government and already the explanations are falling apart.
“You can’t use the funding from an unfunded programme to pay for cheaper bills.”
Meanwhile, financial guru and founder of MoneySavingExpert, Martin Lewis, said the VAT cut would have little impact.
“This is a good totemic step and very welcomed,” he said. "Yet in practice people won’t feel much benefit.”
Further concern was shown among energy experts, including Simon Francis, coordinator of the End Fuel Poverty Coalition, who said the support "does not address the scale of what households are facing".
He said millions would still be left paying an unaffordable share of their income on energy and record levels of energy debt were built up over successive winters of high bills.
Mr Francis said: “This breathing space is also not a cure. The only way to bring bills down for good is to change how they are set. That means breaking the link between gas and electricity prices, tackling excess profits in the energy industry and ending our exposure to volatile fossil fuel markets through home-grown renewables and more energy-efficient homes.”
