Britain’s new Prime Minister Andy Burnham convened his first Cabinet meeting on Tuesday, pledging to prioritize easing the cost-of-living pressures affecting millions of people across the country. Burnham, who assumed office on Monday after replacing Keir Starmer as leader of the Labour Party, outlined a government agenda focused on economic relief, decentralization of political power, industrial revitalization, and addressing homelessness.

One of Burnham’s initial policy moves was to announce a reduction in the value-added tax (VAT) on consumer electricity bills, effective October 1. This measure is expected to save the average household approximately £45 ($60) annually. The government said this tax cut will cost around £850 million ($1.14 billion) in the current financial year and will be funded by cancelling Starmer’s previously proposed digital ID scheme, which was projected to cost £1.8 billion. However, some within Labour, including former minister Darren Jones, questioned whether the ID plan had ever been fully funded and emphasized the need for clear fiscal plans to support new policies. Burnham has stated that his government will maintain fiscal discipline and clearly demonstrate how it intends to finance its initiatives.

Burnham’s Cabinet reshuffle reflected a significant break from Starmer’s tenure. Rachel Reeves was removed as finance minister and replaced by John Healey, a former defense secretary known for advocating higher defense spending amid global security concerns. Healey now faces the challenge of reconciling increased military expenditure with fiscal constraints. Wes Streeting, who resigned as health secretary earlier this year and had initially considered challenging Burnham for party leadership, took over the defense portfolio. The new government also appointed Ed Miliband as foreign secretary, with Angela Rayner returning as housing secretary and Jonathan Reynolds assuming an expanded role that includes innovation and science. The Cabinet, consisting of 23 members, features 12 women and 11 men, though women occupy fewer top-tier positions than before.

Burnham’s first speech as prime minister emphasized a commitment to delivering tangible relief to households burdened by rising living costs. He called for a “one-team approach” within the government and signaled plans to introduce further measures including rent controls and caps on bus fares. Additionally, he expressed intentions to shift political power away from London to regional centers, support the re-industrialization of Britain, increase public ownership in utilities, and accelerate the construction of public housing. A comprehensive 10-year plan is expected to be released later this year.

Despite Burnham’s calls for party unity, the prompt dismissal of many Starmer loyalists and the rapid cabinet overhaul point to ongoing factional tensions within Labour. Burnham also faces a challenging economic backdrop characterized by sluggish growth, rising government debt, and pressures from unpredictable energy prices exacerbated by international conflicts. He began his tenure by engaging with global leaders, including U.S. President Donald Trump, Ukrainian President Volodymyr Zelensky, and French President Emmanuel Macron, highlighting the government’s intention to maintain active diplomatic relations amid domestic and international challenges.

Burnham is Britain’s seventh prime minister in just over a decade, stepping into office without a fully detailed roadmap for achieving his stated goals. Meanwhile, opposition figures have questioned his mandate and called for an early general election ahead of the next scheduled vote in 2029.