Andy Burnham has promised to “bring back hope” to Britain after becoming prime minister, appointing former defence secretary John Healey as chancellor and pledging broad economic reforms.
Burnham replaced Keir Starmer as leader of the governing Labour Party after Labour lawmakers forced the former prime minister from office. Speaking outside 10 Downing Street, he acknowledged that many people were “fed up” with politics and said the government needed to deliver meaningful change.
He said ministers would announce “some breathing space” on Tuesday to help households facing rising living costs. The fully funded package is expected to include support with energy bills and lower bus fares.
Burnham also said the government would examine “any flexibility” within its existing fiscal rules to borrow more for infrastructure while maintaining a “very prudent” approach to the economy.
UK government bond prices fell following his comments amid concerns that higher borrowing could increase public debt. Financial markets had closed by the time Healey, 66, was confirmed as chancellor, the minister responsible for the country’s finances.
Healey emerged as a compromise choice after Ed Miliband and Shabana Mahmood were linked with the role. Miliband was appointed foreign secretary, while Mahmood remains home secretary.
Burnham’s first call with a foreign leader was with US President Donald Trump, whom he invited to Manchester for next year’s G20 summit.
Trump later said the pair “had a very good conversation” about Iran, trade and the US-UK military alliance, adding that they planned to meet “in the not too distant future”.
Burnham is Britain’s sixth prime minister in a decade and the seventh since 2016, following years of political instability.
Speaking without notes, he said: “I am acutely conscious that I am the sixth person in the last 10 years to walk up this street, the seventh prime minister since 2016, making this a moment for reflection and new resolution.”
“It requires my generation of politicians to raise our game and rise to the new challenge. Britain needs to show the world that we can regain our stability once again, and that is our challenge to make politics work, to make it work better.”
“I know people at home are fed up with politics. I hear you, and I want to be honest with you. We have not been good enough, and we need to be better. We will be.”
He added: “Let’s build a new national sense of unity, of common purpose, and positivity. Let us make this the moment when Britain starts to believe again, the moment we bring back hope.”
Burnham removed several senior figures associated with Starmer, including former chancellor Rachel Reeves and deputy prime minister David Lammy, before announcing his cabinet.
Louise Haigh was appointed first secretary of state and chancellor of the Duchy of Lancaster. Yvette Cooper moved to the Department of Health to oversee social care reform, while Pat McFadden remains work and pensions secretary. Angela Rayner has returned as housing secretary.
Economic reform is at the centre of Burnham’s programme. He argues that many communities have still not recovered from the deindustrialisation and centralisation of political power that took place during the 1980s.
“We will make this moment a circuit breaker for Britain, bringing forward the biggest changes in the last 40 years. A new political model and a new economic model,” he said.
“In the 1980s, Britain took some wrong turns. Political power was centralised, economic power privatised, large parts of the country deindustrialised and they still haven’t recovered.”
“Many feel as though they’re still in decline, and they don’t have the ability to turn things around. And that’s why we will change politics to make it more collaborative, more about problem-solving than point-scoring. And we will take power out of here and carry it into every postcode in the land so that they can do more.”
Healey will be responsible for funding Burnham’s plans for industrial growth, regional devolution and higher defence spending while keeping the government within its fiscal rules.
Burnham said the cost-of-living package would provide immediate help with energy and transport costs. Longer-term proposals could include freezing rents in the private housing sector.
“We just want to do some things that people will feel, and feel quite quickly. It won’t solve everything, it won’t take all of the pressure off, but it just shows the direction of travel and that we’re serious about helping them out,” he said.
Addressing concerns about borrowing, Burnham added: “I’ve said we’ll stick to the fiscal rules and by that I mean the existing fiscal rules and use, obviously, any flexibility within them.”
“So none of this is about taking risks with the economy. I’ve never done that in any role that I’ve had. I’ve always taken a very prudent approach.”
Burnham also pledged to end rough sleeping and suggested that a future budget could reduce income tax for lower earners. However, he did not rule out restoring the 50% top rate of income tax to help fund the measure.
