Andy Burnham has taken office as prime minister and ordered his cabinet to explore every avenue to address Britain's cost of living crisis. On his first full day in power, Burnham instructed ministers to examine "all possible ways" to fund relief measures, particularly removing VAT from electricity bills.
The new prime minister faces immediate pressure over funding commitments. His cabinet includes John Healey as chancellor, who resigned from Keir Starmer's government last month over defence spending disagreements. Burnham's stated intention to increase defence spending now puts him at odds with Healey's previous position, raising questions about how the government will pay for both the VAT removal and military investment.
Opposition critics have seized on the funding gap. Burnham has not detailed where money will come from to finance these policies, creating a central vulnerability for his nascent administration. The cabinet directive signals the government lacks a coherent spending plan entering its opening week.
The timing reflects political reality. Burnham took control from Starmer amid party turbulence, and his administration faces the dual challenge of appearing fiscally responsible while delivering on populist pledges to ease household energy costs. The VAT removal on electricity would directly cut bills for struggling families, a central campaign promise.
Healey's presence as chancellor complicates matters further. His prior defense secretary role ended in resignation over disagreement on spending priorities. Now tasked with finding funds for both the VAT cut and increased defence outlays, Healey must bridge positions he previously opposed.
The cabinet order suggests Burnham hopes collective deliberation will produce solutions his team has not yet articulated publicly. This approach risks appearing reactive rather than prepared. Westminster observers view the funding questions as a test of whether Burnham can govern effectively after internal party chaos forced Starmer's departure.
The government's first significant test comes through these contradictory spending commitments. Resolution requires