Andy Burnham has opened his first full cabinet meeting with a clear promise: his government will focus on easing the pressure of everyday life for struggling households. He said he wants to lead a “cost of living government,” giving families a sense that help is on the way as prices continue to weigh on them.
In his first major policy move as prime minister, Burnham announced that VAT on household electricity bills will be cut from 5% to zero from October in England, Wales and Scotland. The government says this will save a typical household about £45 a year, although the plan has already triggered an early row over how it will be paid for, according to BBC News.
Downing Street says the estimated £850m cost of the tax cut can be covered by money once set aside for Sir Keir Starmer’s digital ID scheme. But critics, including former cabinet figures and opposition MPs, say the funding is unclear and accuse the new government of rushing ahead without a solid financial plan.
Burnham defended the move, saying ministers must be willing to “reprioritise” spending and make “difficult decisions” if they want to deliver relief quickly. He told his top team that every department should look for ways to lower costs for households, while also promising that the government would explain how each policy is funded.
The reshuffle that brought Burnham to power also swept in major changes across government. John Healey, now chancellor, has said fiscal discipline will be his first duty, even as ministers prepare a wider package of measures in the coming days.
Burnham has also confirmed plans for a new Downing Street unit in Manchester, known as No 10 North, part of a broader effort to shift some power away from London and focus on regional growth.
