New UK Prime Minister Andy Burnham has announced a cut to value-added tax (VAT) on household electricity bills, unveiling the measure as his first major policy aimed at easing the country’s cost-of-living pressures while convening his first cabinet meeting.
The tax on consumer electricity bills will be removed from October, reducing annual household bills by about £45 ($61). The government says the policy will initially be funded by scrapping plans to introduce digital identity cards.
Business Secretary Jonathan Reynolds welcomed the move, describing it as “a tremendous announcement for the first day of the new cabinet.”
Burnham, 56, took office after replacing Keir Starmer at Downing Street following Labour’s leadership change. Speaking outside Number 10 after formally meeting King Charles III, he pledged to build “a new political model” and “a new economy”, while promising immediate support for struggling households.
“Give people some breathing space now, some help with the cost of living,” Burnham said.
The new prime minister also vowed to re-industrialise Britain, decentralise power away from Westminster, increase public housing and end rough sleeping, saying he would soon unveil a 10-year national plan for the country.
Major Cabinet Reshuffle
Burnham quickly asserted control over his administration by removing several ministers closely associated with former Prime Minister Keir Starmer.
Among the changes, former Defence Secretary John Healey became finance minister, Ed Miliband was appointed foreign secretary, Angela Rayner returned to government, Wes Streeting became defence secretary, while Shabana Mahmood retained her role as home secretary to continue reforms of Britain’s asylum system.
International Calls
Burnham also held his first telephone conversation with US President Donald Trump, reaffirming Britain’s commitment to defence and security.
Trump described the discussion as “a very good conversation” and said the two leaders discussed trade, military cooperation and security in the Strait of Hormuz.
“He has got a big job ahead of him, but he will be able to do it and, of course, the U.S.A. will be there to help!” Trump wrote on Truth Social.
Burnham also assured Ukrainian President Volodymyr Zelensky of Britain’s “resolute commitment” to supporting Ukraine against Russia’s invasion.
French President Emmanuel Macron congratulated the new prime minister and called for renewed cooperation between Britain and the European Union.
Challenges Ahead
Burnham assumes office facing mounting economic and political challenges, including sluggish economic growth, high government borrowing costs, rising welfare spending, persistent irregular migration and volatile global energy prices.
The former Greater Manchester mayor also faces pressure from opposition parties, which have questioned his mandate and called for a snap general election after his unopposed rise to Labour leadership and the premiership.
