Burnham prioritises living costs in first cabinet meeting
Prime Minister Andy Burnham has emphasised the need to address living expenses during his inaugural cabinet meeting, following the announcement of a VAT cut on household electricit
By BBC News
Andy Burnham has pledged to lead a "cost of living government" as he chaired his first cabinet meeting since becoming Prime Minister. He expressed his intention to prioritise living expenses and provide the public with a "sense that help is coming" regarding costs.
This meeting follows Burnham's announcement of a VAT reduction on household energy bills, set to take effect in October. This marks his first significant policy initiative since taking office.
However, the funding for this VAT cut, estimated to cost £850 million for the remainder of the financial year, has sparked controversy. Burnham proposed to finance it by cancelling the digital ID scheme initiated by former leader Sir Keir Starmer, which was projected to cost £1.8 billion over three years. Critics, including former cabinet member Darren Jones, have raised concerns about the adequacy of this funding plan.
The Prime Minister's spokesperson stated that the VAT cut would be funded by reallocating savings identified by government departments. Opposition parties have challenged this, noting that the government's budget watchdog had indicated that funds for the digital ID scheme were to be sourced from existing budgets.
During the cabinet meeting, Burnham received applause from his ministers as he outlined his priorities. He has made several appointments, including Dan Jarvis as Defence Secretary and James Murray as Financial Secretary to the Treasury.
Scottish Labour leader Anas Sarwar is expected to join Burnham's government as a business minister, pending a seat in the House of Lords. This change will require Sarwar to resign from his position in the Scottish Parliament, but a by-election will not be necessary due to his election via the regional list system.
Burnham's cabinet reshuffle has seen several Starmer loyalists removed, with Ed Miliband taking on the role of Foreign Secretary and Louise Haigh appointed to run the Cabinet Office. Miatta Fahnbulleh, now Energy Secretary, defended the reshuffle, asserting that no one has an inherent right to cabinet positions.
In his address to Treasury staff, new Chancellor John Healey reaffirmed his commitment to maintaining tax and spending discipline while also advocating for increased public investment.
Burnham has indicated that further measures to address the cost of living will be announced soon, urging ministers to propose ways to reduce household expenses. He acknowledged that funding new initiatives would necessitate a reassessment of budget allocations.
Additionally, Burnham has approved the use of British military bases for US defensive operations against Iran, continuing a policy from the previous administration. This decision is limited to operations deemed defensive by the UK government.
The VAT cut on household electricity bills, which will reduce the rate from 5% to zero, is expected to save the average household approximately £45 annually. However, this measure will not apply in Northern Ireland due to previous agreements made by the Conservative government, which have instead allocated additional funds for cost of living support in the region.
Burnham's government is also planning to establish a new unit in Manchester, referred to as No 10 North, to oversee local economic growth and devolution strategies. Civil servants in London have been offered relocation packages to encourage them to move north, with Burnham aiming to work from No 10 North at least once a week.