Burnham Reshuffles Cabinet, Healey Takes Treasury Amid Spending Promises
New Chancellor Faces Scrutiny Over Economic Vision and Defence Spending Demands
Image: Eddie Pollard / AI
Sarah Connor
Andy Burnham has appointed John Healey as Chancellor of the Exchequer, a move that surprised many in Westminster, his Labour colleagues, and the British public.
Pat McFadden's appointment followed Rachel Reeves' removal as Chancellor, hours after Burnham arrived at Downing Street.
Burnham purged Keir Starmer's allies from the government, signaling a decisive shift in power.
Wes Streeting now serves as Secretary of State for Defence, taking McFadden's previous position, while Ed Miliband moved to the Foreign Office.
Shabana Mahmood remains at the Home Office, and Angela Rayner assumed the role of Secretary of State for Housing, Communities and Local Government.
Pat McFadden remains at the Department for Work and Pensions; Miatta Fahnbulleh became the new Energy Secretary.
Anneliese Midgeley holds the critical task of maintaining loyalty among Labour MPs, a vital role in the new administration.
Burnham telephoned a number of Keir Starmer's allies on Monday afternoon, removing them from the cabinet.
Those sacked by Burnham fell into three groups: some for their politics, others for poor performance, and some disliked within the parliamentary Labour party.
The new government announced an immediate cut in VAT on energy bills, part of a flurry of spending pledges.
These pledges include help for the 'cost of living,' more council houses, and increased social care provisions.
Darren Jones made a public swipe at Andy Burnham's energy bills policy, indicating early internal dissent within the party.
Burnham previously supported the government’s fiscal rules and preferred 'public control' over public ownership, raising doubts about his intended changes.
He reversed course in the face of a loud public campaign against Miliband’s appointment, which centered on warnings of an impending market backlash.
Some of Burnham’s allies briefed against Miliband due to his support for net zero policies, a position seen as alarming amid rolling heatwaves.
McFadden's appointment raises questions about the transformative economic program required to end four decades of neoliberalism, given his past record.
He served as a minister in Gordon Brown’s Treasury from 2002 to 2007, a period when the government remained committed to an economic model built on significant financial deregulation in the City of London.
This model relied on dependence on the City, reduced corporation-tax rates, the Private Finance Initiative, and diminished trade-union power.
His resignation from Keir Starmer’s cabinet in support of even higher defence spending offers further cause for alarm regarding fiscal priorities.
McFadden previously advocated for the UK to increase defence spending to 3 percent of GDP by 2030, a substantial financial commitment.
The Ministry of Defence (MoD) habitually demands funding for projects that end up billions of pounds over budget; the defence review, supposedly fully funded, later revealed an £18bn black hole.
Billions were spent on aircraft carriers, which former chief of the defence staff David Richards derided as 'unaffordable vulnerable metal cans,' and Ajax armoured vehicles arrived eight years late after numerous problems.
As Defence Secretary, McFadden could have challenged the MoD over its inefficiency, overspending, and dysfunctional procurement, but instead amplified its demands for more money.
This approach likely means a renewed assault on welfare spending to fund additional weapons, especially with veteran rightwinger Pat McFadden remaining at the Department for Work and Pensions.
The defence of McFadden’s appointment suggests No 10 will maintain an unusually tight grip over economic policy, centralising control.
Burnham has his own economic advisers, including former Goldman Sachs chief economist Jim O’Neill, who favors applying greater flexibility to the fiscal rules that constrain Britain’s ability to invest.
Bianca stated that Burnham must balance those who create wealth in the economy and drive business with the risk of alienating them.
Michael Bowden commented that solving a national crisis differs significantly from combating a regional one, and every pound spent in the North means a pound not spent in the South.
The Armed Forces have a firm friend in the Treasury.
Canada joined a UK-led international alliance to build an £8.6 billion stealth jet, while a Russian warship conducted a live firing exercise off the coast of Devon on Monday.
Many in Westminster are discussing the possibility of Andy Burnham taking advantage of a potential bounce in opinion polls to call a snap general election.
Burnham faces a choice between pursuing an election and a slow decline, similar to what was observed with Gordon Brown.