Andy Burnham has officially assumed the role of Prime Minister, commencing a significant reshuffle of his cabinet and signaling a distinct shift towards a more left-wing government. In his initial address, Burnham pledged to introduce a "ten-year plan" aimed at reindustrializing Britain and placing essential services under "stronger public control."
Burnham's arrival at 10 Downing Street saw the departure of several key figures from the previous administration, including Chancellor Rachel Reeves and Deputy Prime Minister David Lammy. Ed Miliband and Shabana Mahmood, both considered contenders for the Chancellor position, were seen entering Downing Street together. Former defence secretary John Healey has also been noted in Downing Street amid speculation of a comeback.
In his first speech as Prime Minister, Burnham stated that Labour "needs to be better" and outlined his vision for significant changes, which he described as the "biggest changes in the last 40 years." He articulated a belief that Britain took wrong turns in the 1980s, with power becoming centralized, economic power privatized, and large parts of the country de-industrialized. His plan involves devolving power away from Westminster and fostering a more collaborative approach to governance.
Burnham indicated that immediate measures to address the cost of living would be announced, potentially including rent controls and curbs to energy bills. He also signaled an intent to reintroduce an inheritance tax, referred to as a "death tax," to fund social care reforms, and suggested the possibility of a 50 pence top rate of tax, despite prior commitments ruling out such a move.
Economically, markets showed some apprehension, with interest rates on 30-year gilts increasing and the pound slipping against the U.S. dollar. While speculation that Shabana Mahmood might be appointed Chancellor calmed markets somewhat, any further unexpected appointments could elicit a negative response.
On other fronts, the new Prime Minister has had his first call with Donald Trump, inviting him to visit Manchester. The European Union has welcomed Burnham, who has previously supported rejoining the bloc. Burnham also confirmed that the government will adhere to Labour's 2024 manifesto promise not to issue new oil and gas drilling licenses in the North Sea, though expanded drilling at existing sites may be considered.
Burnham faces decisions regarding the potential temporary nationalization of Thames Water, which is grappling with significant debt. Reforming social care is also highlighted as a priority. Liberal Democrat leader Sir Ed Davey and Kemi Badenoch of the Conservative party have both written to the new Prime Minister, with Badenoch urging a focus on cutting spending and ruling out tax rises.