The queues into Downing Street were long and hot, a stream of northern Labour folk dressed smarter than Londoners, as Andy Burnham chaired his first cabinet meeting as prime minister. Promising to lead a “cost of living government,” he told his new top team he wanted living expenses to be the key priority, giving people a “sense that help is coming.”
His first major announcement—a cut in VAT on household electricity bills from October—immediately sparked a row over how it would be funded. Downing Street said the estimated £850m cost over the rest of the financial year could come from £1.8bn earmarked by the previous government for Sir Keir Starmer's digital ID scheme, which Burnham plans to scrap. But Darren Jones, one of the Starmer loyalists sacked from the cabinet on Monday, said the ID programme was “unfunded” and Burnham would need to explain where the money would come from.
“Burnham chairs first cabinet, announces VAT cut on energy but faces row over funding by scrapping digital ID scheme.”
Conservative shadow chancellor Sir Mel Stride seized on the row, saying: “We are only one day in and already Labour are playing fast and loose with the public finances.” The prime minister's spokesman insisted the policy would be funded by redirecting “savings” already identified by departments to cover the ID scheme's cost.
Later, Burnham turned his attention to struggling high streets, announcing a 20% cut in business rates for clubs, live music venues and pubs across England from next April—saving the average pub around £1,000. “Pubs need to know that the cavalry is coming,” he said.
The appointments below cabinet rank continued on Tuesday evening. Dan Jarvis, who stepped in as defence secretary when John Healey resigned amid a funding row, returned to his previous post as security minister. James Murray, who became health secretary when Wes Streeting quit in May, was made financial secretary to the Treasury and paymaster general. Scottish Labour leader Anas Sarwar is set to be given a seat in the House of Lords so he can join the government as a business minister—though new rules would force him to quit the Scottish Parliament, where he was elected on the regional list system.
The reshuffle on Monday had seen Starmer loyalists including Rachel Reeves and David Lammy removed, with Ed Miliband promoted to foreign secretary and Burnham ally Louise Haigh given the Cabinet Office. Miatta Fahnbulleh, another Burnham ally, became energy secretary. As one observer noted, Burnham has created a formidable “Starmerite briefing machine” against him—and by the following morning, via Darren Jones, it had already begun.