Britain's new Prime Minister Andy Burnham announced on 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 £45, or HK$475, 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.

It said the policy would be funded by cancelling previous prime minister Keir Starmer's plan for a digital ID scheme that would have cost the taxpayer £1.8 billion.

Burnham also moved swiftly to stamp his authority on the new government by sacking several loyalists of former prime minister Keir Starmer from his cabinet, including Rachel Reeves and David Lammy, while moving some ministers to other jobs and promoting allies.

Ex-defence secretary John Healey replaced Reeves as finance minister, Ed Miliband became foreign minister and left-wing figurehead Angela Rayner returned to government.

Wes Streeting, who abandoned plans to run against Burnham for the Labour leadership, is now defence minister.

Shabana Mahmood was reappointed interior minister to see through her hardline reforms of Britain's asylum system. (AFP)



Edited by Aaron Tam