Burnham tells cabinet to tackle living costs at first meeting
BBC News 2026-07-21 17:25:41
Context: Andy Burnham, the newly appointed Prime Minister, chaired his first cabinet meeting, promising to lead a "cost of living government" and make living expenses a key priority. He announced a VAT cut to household energy bills from October, and his team is working on further measures to lower costs to households. The cabinet reshuffle saw several Starmer loyalists, including Rachel Reeves and David Lammy, leave the government, while Ed Miliband was promoted to foreign secretary.
Key Facts
- Andy Burnham's government plans to cut VAT on household electricity bills from 5% to zero in England, Wales, and Scotland, which is estimated to save the typical household about £45 a year.
- The estimated £850m cost of the VAT cut over the rest of the financial year will be funded by redirecting £1.8bn earmarked by the previous government to roll out Sir Keir Starmer's digital ID scheme in the next three years.
- Burnham's chancellor, John Healey, has recommitted to the tax and spending rules set by his predecessor, while also seeking to make the "fullest possible use of public investment" within the framework.
- A new Downing Street unit in Manchester, known as No 10 North, will be given control of aspects of local economic growth and devolution strategy, and will be initially set up in a building currently housing intelligence service GCHQ.
- The government has allocated an additional £340m to tackle rough sleeping over five years, which is expected to be funded within "uncommitted" spending at the housing department.