Britain’s new Prime Minister, Andy Burnham, has announced a tax cut on household electricity bills as one of his first major policy decisions, saying the measure is aimed at easing the cost of living crisis facing millions of families.
The announcement came a day after Burnham formally took office, replacing Keir Starmer as prime minister following a Labour Party leadership change that also triggered a major cabinet reshuffle. Blueprint reports
Electricity tax to be scrapped
Speaking ahead of his first cabinet meeting on Tuesday, Burnham disclosed that the five per cent value added tax (VAT) on domestic electricity bills would be removed from October.
The measure is expected to save households about £45 ($61) annually and will initially be financed by cancelling the government’s proposed digital identity card programme.
Business Secretary Jonathan Reynolds described the policy as a significant first step by the new administration, saying it demonstrated the government’s determination to provide immediate relief to struggling households.
Burnham said the decision was intended to give families “some breathing space” as they continue to grapple with rising living costs and economic uncertainty.
New vision for Britain
After being invited by King Charles III at Buckingham Palace to form a government, Burnham pledged to embark on an ambitious programme to rebuild Britain’s economy and reform governance.
Addressing the nation outside 10 Downing Street, the 56 year old prime minister promised to re industrialise Britain, decentralise political power away from Westminster, expand public housing and eliminate rough sleeping.
He also announced plans to unveil a comprehensive 10 year national development strategy, describing it as a blueprint for building “a new political model” and “a new economy” capable of restoring confidence in the country.
Burnham said Britain must demonstrate to the world that it can regain political and economic stability after years of uncertainty.
Major cabinet reshuffle
One of Burnham’s first actions in office was to reorganise the cabinet by removing several ministers considered loyal to his predecessor, Keir Starmer.
Former Chancellor Rachel Reeves was replaced by ex Defence Secretary John Healey as finance minister, while Ed Miliband was appointed foreign secretary. Senior Labour figure Angela Rayner also returned to government, while Wes Streeting assumed office as defence secretary after stepping aside during the Labour leadership contest.
Shabana Mahmood retained her position as home secretary to continue overseeing reforms of Britain’s immigration and asylum policies.
The cabinet changes are widely seen as an attempt by Burnham to consolidate his authority and install trusted allies in key government positions.
Calls with world leaders
Burnham wasted little time engaging international leaders following his assumption of office.
During his first telephone conversation with United States President Donald Trump, both leaders reaffirmed their commitment to strengthening defence cooperation, trade relations and broader strategic ties.
Trump described the discussion as productive and expressed confidence in Burnham’s ability to lead Britain, adding that the United States would continue to support its long standing ally.
The new British leader also held talks with Ukrainian President Volodymyr Zelensky, reiterating the United Kingdom’s continued support for Ukraine in its defence against Russia’s invasion.
French President Emmanuel Macron congratulated Burnham on his appointment and called for renewed momentum in relations between Britain and the European Union.
Economic and political challenges
Despite his ambitious agenda, Burnham assumes office at a challenging period for Britain’s economy.
The country continues to battle sluggish economic growth, rising government borrowing costs, increasing welfare expenditure and persistent pressure from irregular migration across the English Channel.
Volatile global energy prices, driven partly by tensions in the Middle East, alongside uncertainty in international markets, are also expected to test the new administration.
Political analysts say Burnham will face limited fiscal flexibility because of Britain’s high public debt and existing budget rules requiring government spending to remain aligned with tax revenues.
Labour seeks fresh momentum
Burnham’s emergence as prime minister followed Keir Starmer’s resignation after losing the confidence of Labour lawmakers despite leading the party to a landslide election victory in 2024.
The former Greater Manchester mayor, popularly known as the “King of the North”, was chosen by Labour legislators as the leader best positioned to restore public confidence and counter the growing popularity of Nigel Farage’s Reform UK Party.
However, opposition parties have questioned Burnham’s democratic mandate, arguing that his appointment without a nationwide election lacks public endorsement and have called for an early general election.
Even so, Burnham has insisted his administration will focus on improving living standards, rebuilding Britain’s industrial base and restoring public trust through a decade long programme of economic and social renewal
