Prime Minister Andy Burnham has come under scrutiny following the announcement of an £850 million tax cut on electricity bills, his first major policy aimed at addressing the ongoing cost of living crisis. The measure, expected to reduce household energy costs by approximately £45 annually, is scheduled to take effect on October 1.

Burnham conveyed his intentions during his initial cabinet meeting, emphasizing a focus on alleviating financial pressures facing families. He described his administration as a "cost of living government" and urged ministers to explore all avenues to ease economic burdens on households. The prime minister also pledged transparency on fiscal matters, committing to demonstrate how his government will finance new initiatives through reprioritization and clear funding strategies.

The tax cut has sparked debate over its financing, particularly amid speculation that Burnham may introduce a new wealth tax and consider raising the income tax threshold from the current £12,570 to support additional spending. Critics, including Darren Jones—a former chancellor to ousted prime minister Sir Keir Starmer and a prominent Starmer ally—have challenged the government’s claims that the £850 million package could be funded through savings from canceling the digital ID scheme. Jones described the digital ID project as "unfunded" and insisted that the government must provide explicit funding details in the upcoming Budget.

Tensions have also emerged within the party ranks following Burnham's reshuffle, which included the removal of several Starmer loyalists. Reports indicate that some of these former officials gathered in north London to discuss concerns about the new administration, notably criticizing the replacement of Rachel Reeves as chancellor with John Healey.

In response to the controversy, Burnham assured the cabinet and the public that fiscal responsibility would remain a priority. He stated, “always we will show how we are going to pay for it, what we are reprioritising," underscoring the importance of sustainable policy implementation.

As the government prepares to detail its broader economic strategy in the coming days, attention will focus on how Burnham balances ambitious social support measures with commitments to transparent and sustainable financing.