Britain’s new Prime Minister, Andy Burnham, has announced a tax cut on household electricity bills as one of his first major policy decisions after taking office, pledging to ease the cost-of-living pressures facing millions of families.
The announcement came on Tuesday as Burnham prepared to chair his first Cabinet meeting after replacing Keir Starmer as Prime Minister and reshuffling key positions in the government.
The government confirmed that the 5% value-added tax (VAT) on consumer electricity bills will be removed from October, reducing annual household costs by an estimated £45 ($61). The measure will initially be funded by cancelling plans to introduce a nationwide digital identity programme.
Business Secretary Jonathan Reynolds described the move as “a tremendous announcement for the first day of the new cabinet.”
The tax cut follows Burnham’s campaign pledge to “give people some breathing space now, some help with the cost of living.”
Burnham Outlines Economic Vision
After being formally appointed Prime Minister by King Charles III at Buckingham Palace, Burnham pledged to rebuild Britain’s economy through re-industrialisation, decentralisation of power and increased public investment.
Speaking outside 10 Downing Street, he said Britain must “regain stability”, promising to create “a new political model” and “build a new economy.”
He also reaffirmed his commitment to delivering a 10-year national plan focused on economic recovery, although detailed proposals are expected to be unveiled in the coming days.
Among his immediate domestic priorities are:
- Reducing the cost of living.
- Expanding public housing.
- Decentralising power away from Westminster.
- Strengthening domestic manufacturing through public procurement.
- Ending rough sleeping across Britain.
Burnham also reiterated his belief that “in the 1980s Britain took some wrong turns,” promising to “put life’s essentials back under stronger public control to make them affordable.”
Cabinet Reshuffle Signals New Direction
In a sweeping Cabinet reshuffle, Burnham removed several senior ministers who had served under former Prime Minister Keir Starmer while promoting key allies to top government positions.
Among the major appointments:
- John Healey becomes Chancellor, replacing Rachel Reeves.
- Ed Miliband is the new Foreign Secretary.
- Wes Streeting has been appointed Defence Secretary.
- Angela Rayner returns to government.
- Shabana Mahmood remains Home Secretary to continue reforms of Britain’s asylum system.
The reshuffle is widely seen as Burnham’s effort to consolidate authority and chart a distinct course for his administration.
First Calls With World Leaders
Burnham also held his first conversations with several international leaders, including U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky.
According to Downing Street, Burnham reaffirmed Britain’s “commitment to defence and security” during his call with Trump.
Trump later described it as a “very good conversation”, adding that the two leaders would meet “in the not too distant future.”
“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, noting that both leaders discussed trade, defence cooperation and the Strait of Hormuz.
During his conversation with Zelensky, Burnham reaffirmed Britain’s “resolute commitment” to supporting Ukraine in its defence against Russia’s invasion.
French President Emmanuel Macron also congratulated Burnham and urged him to “give new momentum to the partnership” between Britain and the European Union.
Challenges Facing The New Prime Minister
Burnham assumes office at a challenging time for Britain, with the country grappling with sluggish economic growth, rising government borrowing costs, an expanding welfare bill, irregular migration across the English Channel and global uncertainty linked to the ongoing U.S.-Iran conflict.
His administration is also expected to contend with political pressure from Nigel Farage’s Reform UK party, which has gained momentum amid growing public dissatisfaction.
Despite the challenges, Burnham has promised to pursue long-term reforms aimed at restoring public confidence in government while delivering economic stability and lowering the financial burden on households.
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