John Healey, who resigned as defence secretary just over a month ago accusing the Treasury of being “unwilling” to properly fund the armed forces, has been handed control of the nation’s purse strings in Andy Burnham’s first cabinet.
The surprise appointment blindsided Westminster, where Ed Miliband and Shabana Mahmood had been tipped for the role. Instead, Miliband becomes foreign secretary and Mahmood stays at the Home Office with a mandate to deliver her hard-line immigration reforms. Rachel Reeves, who served as chancellor under Sir Keir Starmer, was forced out – too closely tied, sources said, to the cut to the winter fuel allowance.
“Andy Burnham appoints John Healey as chancellor in surprise cabinet, weeks after he resigned as defence secretary over military spending.”
Healey’s return to government in the most powerful job after the prime minister is an even bigger surprise than his resignation, which came days before Burnham’s pivotal by-election in Makerfield and hastened Starmer’s departure from Downing Street. The 66-year-old Yorkshireman, seen as a “safe pair of hands”, has been on the Labour frontbench almost continuously since 2001.
But now he must deliver on what he said the Treasury failed to do. When he quit, he had been offered only an extra £13.5bn – what amounted to a 0.08% increase in the defence budget. Those close to him said the real offer was only £10bn, with the rest “Treasury Trickery”. He wanted a clear timetable to meet the promise of spending 3% of GDP on defence by 2030, the year Nato has said the alliance must be ready for conflict. Under Starmer, the pledge remained vague. According to the Office for Budget Responsibility, reaching 3% would demand an additional £17.3bn per year by 2029-30, pushing the overall defence budget from more than £63bn a year to closer to £90bn.
Burnham, speaking without notes outside No 10, acknowledged people were “fed up” with politics and promised to “bring back hope”. He said his “first instruction” would be to end rough sleeping, backed by an additional £340m to support at least 3,000 people across England. He also pledged to announce “some breathing space” on Tuesday on the cost of living, with plans to cut energy bills and bus fares.
In his first world leader call, Burnham spoke to Donald Trump – who had previously suggested he was just mayor of “some town” – inviting him to Manchester for next year’s G20 summit. He also called Ukraine’s Volodymyr Zelenskyy and European Union chief Ursula von der Leyen.
Healey’s parting swipe at “Treasury orthodoxy” suggests he may push for creative funding options, but without extra cash he has been clear Britain’s armed forces will not be ready for rising threats. The question now is whether the new chancellor can wrestle the funding he once demanded – or whether the Treasury will prove as unwilling as before.