New United Kingdom Prime Minister Andy Burnham has announced a tax cut aimed at easing cost-of-living pressures as he prepared to chair his first cabinet meeting on Tuesday.
A day after replacing Keir Starmer in Downing Street and reshuffling the government by removing several of his predecessor’s loyalists, Burnham announced that value-added tax (VAT) on household electricity bills would be scrapped from October.
The new Business Secretary, Jonathan Reynolds, described the move as “a tremendous announcement for the first day of the new cabinet” in an interview with Sky News ahead of Tuesday afternoon’s cabinet meeting.
The measure will remove the current five per cent VAT on consumer electricity bills, saving households about £45 (approximately $61) annually. The government said the policy would initially be funded by cancelling plans to introduce digital identity cards.
The announcement follows Burnham’s pledge to “give people some breathing space now, some help with the cost of living.”
LEADERSHIP recalls that on Monday, Burnham officially became prime minister after meeting King Charles III at Buckingham Palace following Starmer’s resignation.
In his first address outside 10 Downing Street, Burnham pledged to re-industrialise Britain, decentralise power, tackle rough sleeping and launch what he described as “a new political model” to “build a new economy.”
He also said Britain must demonstrate to the world that it could “regain stability.”
King Charles has now appointed four prime ministers since ascending the throne in 2022, while Burnham becomes Britain’s seventh prime minister in just over a decade.
On the international front, Burnham held his first phone call with U.S. President Donald Trump, reaffirming Britain’s commitment to defence and security, according to Downing Street.
Trump described the conversation as “very good” and said the two leaders would meet “in the not too distant future.”
In a post on Truth Social, the U.S. president said they discussed trade, military cooperation and demining the Strait of Hormuz, adding that Burnham “has got a big job ahead of him, but he will be able to do it.”
Burnham also spoke with Ukrainian President Volodymyr Zelensky, reaffirming the UK’s continued support for Ukraine in its defence against Russia’s invasion.
French President Emmanuel Macron congratulated the new prime minister and urged him to “give new momentum” to Britain’s partnership with the European Union.
Burnham also moved swiftly to stamp his authority on the new administration by dismissing several senior ministers associated with Starmer’s government, including former Chancellor Rachel Reeves and former Deputy Prime Minister David Lammy, while reshuffling others and promoting key allies.
Former Defence Secretary John Healey was appointed Chancellor, Ed Miliband became Foreign Secretary, while Angela Rayner returned to government. Wes Streeting was named Defence Secretary, and Shabana Mahmood retained her position as Home Secretary to continue reforms of Britain’s asylum system.
Burnham said his government would soon unveil a 10-year plan for Britain, although he did not provide further details.
He also reiterated his commitment to ending rough sleeping, expanding public housing, re-industrialising the country through public procurement, and devolving more powers away from Westminster.
The new prime minister takes office amid significant economic and political challenges, including sluggish economic growth, rising government borrowing costs, increasing welfare spending, continued irregular migration across the English Channel, volatile global energy prices, and complex relations with the United States.
Burnham, the former Mayor of Greater Manchester, was installed as Labour leader after Starmer’s resignation, with many Labour lawmakers viewing him as the party’s strongest candidate to counter the growing popularity of Nigel Farage’s Reform UK.
However, opposition parties have questioned Burnham’s mandate, arguing that his appointment without a general election justifies calls for an early national vote.
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