Andy Burnham’s first full day as prime minister was overshadowed by a political swipe from a former close ally of his predecessor, as Darren Jones questioned how the new government would fund its pledge to cut VAT on electricity bills. In a post on X, the former chief secretary to the prime minister under Keir Starmer wrote: “Good news that VAT will be cut on electricity bills. It’s a simple way for families to save a few quid, and to mechanically help to keep inflation that little bit lower. But the DigitalID program was unfunded. The government will have to set out how it will pay for its new policies at the budget.” Jones’s criticism carried added sting because the Office for Budget Responsibility’s November Economic and Fiscal Outlook had flagged the missing funding for digital ID cards on multiple occasions, noting on page 172 “the risks around the implementation of digital ID cards for which no explicit provision has been made for its £0.6bn annual cost”.
Burnham began his premiership on 20 July by chopping vegetables with staff at The Passage, a charity helping rough sleepers, before kissing hands at Buckingham Palace and announcing on the steps of Downing Street that his first instruction would be to end rough sleeping. By Tuesday morning he had announced that VAT would be removed from electricity bills from 1 October, reducing the electricity price cap by £45 at a total cost of £850m next year. But the funding question quickly turned to how he would pay for that and an expected uplift in defence spending—an issue that led his new chancellor, John Healey, to resign as Starmer’s defence secretary last month. No 10 has ruled out using defence bonds to pay for higher military spending.
“Burnham's VAT cut faces funding questions after ex-Starmer aide Jones calls out missing budget plan.”
At lunchtime, Burnham gathered his cabinet for the first time after its appointment became a nocturnal affair on Monday, with a minibus of ministerial hopefuls still inside Downing Street at 10pm. One of the later posts filled was defence secretary, a role taken by Wes Streeting. Addressing his top team, Burnham said his would be a “cost of living government” and asked colleagues to examine “all possible ways” to ease pressures. Sources say measures will include reducing the national bus fare cap by a third, from £3 to £2, to be announced on Wednesday. The Guardian also learned Burnham plans to accelerate the timetable for implementing a national care service.
Burnham told ministers: “What can we do just to take that little bit of pressure off people’s shoulders, just to give them that little extra sense that help is coming so that they can have that bit of hope that things are getting better?” Yet his promise to cut VAT—and the broader policy blitz that includes rough sleeping on day one, energy VAT on day two and bus fare cuts on day three—has already drawn questions about affordability. The new prime minister, who emphasised the need to end “factionalism” within Labour just days ago, now faces the task of proving he can deliver change without breaking the bank.
