UK PM Burnham cuts energy VAT, appoints surprise chancellor
New UK prime minister Andy Burnham has immediately cut energy VAT and installed rebel MP John Healey as chancellor, signalling a rapid shift in economic policy and sparking Westminster speculation of a snap election.
Andy Burnham has moved swiftly in his first 24 hours as British prime minister, sacking key allies of his predecessor Keir Starmer, cutting VAT on energy bills, and appointing former defence secretary John Healey as chancellor.
Healey's elevation to the Treasury came as a surprise to Westminster. Five weeks ago, his resignation over military spending helped trigger Starmer's downfall. He was seen heading to Number 10 through a back entrance next to a pub. "I'm on my way to a meeting," he said with a slight smile.
The appointment brings a known quantity to the UK economy. Healey spent five years as a Treasury minister under Tony Blair. "He's not Ed Miliband, he's hard to attack, and he's Treasury-literate," said one former Conservative cabinet minister.
For European defence planners, Healey's move is significant. Ministry of Defence insiders are relieved a chancellor committed to increasing military spending is now in charge of the purse strings. "It's brilliant for us," said one insider.
The same source admitted the MOD was glad he was not returning to his old post. "We were dreading him coming back. He's a difficult person," they said.
Alongside Healey, Burnham brought back two other recent rebels who damaged Starmer: Wes Streeting as defence secretary and Miatta Fahnbulleh as energy secretary. The immediate policy payoff is a cut to VAT on energy bills. The Conservatives support the tax cut but have questioned its funding.
Internal party discipline remains a risk. Former chief secretary Darren Jones has already publicly criticised the energy bills policy. A Labour MP said sacked ministers fell into three categories: "Some went because of their politics, others just weren't good, and then there are those disliked in the parliamentary Labour party."
Election speculation
The speed of Burnham's reshuffle has fuelled intense speculation about a snap general election. Burnham has appeared to rule it out, as it would anger MPs facing seat losses.
Nigel Farage's Reform UK is demanding an election, arguing Burnham lacks a mandate, but the party is actually terrified of one. "We are really worried about a snap election," a source said, grinning. "Which is why we're calling for a snap election."
Opposition parties are nonetheless preparing. "We've started preparing," said a senior Liberal Democrat aide.
The ultimate decision may hinge on the economic outlook. "There is economic pain coming down the horizon," a former Conservative cabinet minister warned. "He faces a choice between going for an election, and a slow decline as we saw with Gordon Brown."
Having reached Downing Street through a major electoral gamble, Burnham may yet decide to throw the dice again.
