Andy Burnham will promise to “give Britain more breathing space” on the cost of living in his first major address to the nation as prime minister on Monday, as he considers radical plans to cut household energy bills by £130 a year and make heat pumps cheaper to run than gas boilers.
The new Labour leader, who took office on Friday, will also acknowledge the turbulence in British politics, becoming the sixth prime minister in 10 years. In his speech outside Downing Street, he is expected to describe the moment as one of “reflection and resolution” and insist the country must be honest about the challenges it faces.
“Burnham promises £130 energy bill cuts, heat pump overhaul, and cost-of-living blitz in first PM speech.”
The pledge comes as Burnham examines proposals drawn up by the thinktank Nesta that would overhaul the way household gas is charged and remove some policy levies from bills, at a cost of £3.2bn a year to the taxpayer. Making electricity cheaper relative to gas would make heat pumps a more attractive option, shaving £130 off average bills.
Andrew Sissons, director of Nesta’s sustainable future project, said: “For years, legacy policy costs have been heavily loaded on to electricity bills, making clean heating options artificially expensive. By combining a zero-taxpayer-cost reform of the gas standing charge with these targeted tariff cuts, the government can deliver around £130 a year in immediate financial relief for the majority of UK households, while making clean heating the cheapest option on the market.”
Under the proposed reforms, Nesta also argues the government should wipe out the backlog of consumer electricity debts at a one-off cost of £2.7bn, providing debt relief for about 2 million households and cutting the £29 a year paid by all households to cover unpaid bills. The costs would be met in the new chancellor’s first budget this autumn, potentially through tax rises.
Burnham’s energy push burnishes his green credentials, which have been questioned since he rejected Ed Miliband as chancellor in favour of the home secretary, Shabana Mahmood. Mahmood is widely tipped to replace Rachel Reeves as chancellor, sparking tensions on the left of the party. But Burnham insisted on Friday he had made no final decisions about his top team, which is expected to be announced on Monday.
Labour’s deputy leader, Lucy Powell, said on Sunday that Burnham will set out a “bolder more ambitious” vision for fixing Britain’s problems, including the crisis-hit social care sector – on which he promised to “expend quite a lot of political capital”. Allies say he will conclude his speech on a message of optimism, telling Labour members last week he wanted to give voters “hope back”.
Burnham becomes prime minister after Keir Starmer formally offers his resignation to the king at Buckingham Palace around lunchtime on Monday. He will then “kiss hands” with the monarch, who will invite him to form the next government, before setting out his vision. He will be greeted by the cabinet secretary, Dame Antonia Romeo, behind the famous black door and receive briefings from officials.
The incoming prime minister is also expected to receive congratulatory calls from world leaders, including US president Donald Trump, who claimed on Sunday that people in Aberdeen will be “dancing in the streets” following reports Burnham could back new oil and gas drilling in the North Sea. Burnham has not yet commented on those reports.
