LONDON, July 21, 2026 (BSS/AFP) - Britain's new Prime Minister Andy Burnham announced Tuesday the removal of value added tax (VAT) on UK domestic electricity bills from October, his first measure to ease the cost of living for millions of Britons.

"We're taking immediate action to cut taxes on energy bills, put more money in people's pockets and bring back hope," he said in a statement one day after he entered Downing Street.

The measure is a saving of about o45 ($61) a year on the average household bill, the Labour government said.

The measure's start date is due to coincide with an expected rise in the UK energy regulator's price cap on electricity and gas prices.

"Government is tackling rising bills with a tax cut to remove VAT from domestic electricity bills from October 1 in time to impact the next Ofgem price cap," Tuesday's statement said.

The government said its policy would be funded by cancelling previous prime minister Keir Starmer's plan for a digital ID scheme that would have cost the taxpayer o1.8 billion.