- Andy Burnham is the UK's latest prime minister today, replacing Keir Starmer.
- Burnham promised a "new economic model" for Britain in a speech outside Downing Street.
- The ex-Mayor of Manchester announced John Healey will be his chancellor
| Will Andy Burnham 'wilt like a lettuce'? | Could Burnham lower ‘mansion tax’ threshold? | Is the triple lock safe under Burnham? | Who could be Burnham’s chancellor? |
Andy Burnham takes over from Keir Starmer just two years after Labour stormed the polls to win the 2024 General Election
Good morning and welcome to our live blog as Andy Burnham is set to become prime minister of the UK today.
He faces a number of daunting challenges, including a ballooning welfare bill, high levels of public debt and deepening cost of living crisis for millions of households.
The UK economy is also growing at a sluggish rate, with GDP rising just 0.1% in the month to May, so Burnham will have to find answers from somewhere rather than relying on growth.
Stay with us as we bring you live coverage, reaction and analysis, as well as predictions on what could be announced.
When is Andy Burnham expected to officially be prime minister?
The MP for Makerfield is expected to become prime minister around lunchtime today.
Burnham will first meet with the King at Buckingham Palace where he will be asked to form a government. This formal process is known as “kissing hands”.
He will then make his way to Downing Street where he is expected to make his first speech as PM before entering No.10 to select his cabinet.
Badenoch wishes Burnham ‘every success’, but criticises lack of ‘clear plan’
Kemi Badenoch has congratulated Burnham on his appointment as leader of the Labour Party and wishes him “every success” – but the niceties stop there.
In an open letter, the Conservative Party leader said the MP for Makerfield will enter office “without having set out a clear plan on any of the issues facing our country”.
“You have refused calls to come to Parliament for questions from MPs, and you have not submitted yourself to serious media scrutiny. This is not a promising start.”
Her letter goes on to say Burnham must “not repeat the mistakes of Keir Starmer’s premiership which failed because he refused to stand up to his left-wing Labour backbenchers and their endless demands for tax rises to pay for more welfare”.
She has pledged to work with the new prime minister to “bring down the benefits bill” while also calling on him to grant licenses to drill for oil and gas in the North Sea.
Who is Andy Burnham?
Andy Burnham returned to the House of Commons on 19 June, and today, just under a month later, is set to become Britain’s sixth prime minister in 10 years.
Burnham entered politics in 1994 as a researcher for Labour MP Tessa Jowell, before becoming a special adviser to Chris Smith, the secretary of state for culture, media, and sport.
He was elected to the House of Commons in 2001 and held junior government positions under New Labour from 2003, eventually joining the cabinet as culture secretary in 2008 and health secretary in 2009.
He unsuccessfully stood to lead the Labour party in 2010 and 2015, before leaving Westminster to become the inaugural Mayor of Greater Manchester.
With Keir Starmer’s Labour government unpopular and slow to deliver, allies of Burnham on the soft left of the party urged him to return to Westminster. He did so on 19 June when he became MP for Makerfield, and less than a month later – on 17 July – he was leader of the Labour party.
Starmer delivers farewell speech before Andy Burnham takes over as new prime minister
Keir Starmer is now on his way to meet the King to officially hand him his resignation as prime minister.
In a farewell speech outside the doors of 10 Downing Street, Starmer said: “I am confident that Britain is now stronger and fairer than it was two years ago. Our economy is stronger. Our public services are on the up, with the biggest fall in waiting times for 17 years.
“Children are being lifted out of poverty every single day. Immigration is down significantly, our defences and security are on a far stronger footing, and our international reputation is greatly enhanced.”
Starmer added that Burnham has his “full support” and thanked the British people for “the opportunity to serve”.
“I go with good grace. I go with a smile. And I’m proud of everything we have achieved. Thank you very much,” he concluded.
BREAKING: Andy Burnham officially becomes prime minister
Andy Burnham is now the UK’s 59th prime minister following a meeting with King Charles III.
The King officially invited Burnham to form a government in a meeting at Buckingham Palace, just minutes after the King accepted Keir Starmer’s resignation.
As is tradition, Burnham “kissed the hands” of the King as he was appointed prime minister.
What has Andy Burnham said before becoming prime minister?
Andy Burnham has now left Buckingham Palace and is on his way to deliver his inaugural speech as prime minister at Downing Street. We’ll get the first official view on what his government will mean then – but what has he said already?
In a speech at the Trades Union Congress headquarters in London on Friday (17 July) Burnham pledged to build a Labour Party that is “distinctively and authentically” Labour.
He said: “We won’t try to out-Green the Greens or out-Reform Reform”, or repeat the mistake of “wearing too many Tory clothes”.
Hinting at reports he will decentralise and devolve power across the UK, Burnham said: “Britain took a series of wrong turns in the 1980s.
“Political power was centralised and economic power was privatised.
“The country surrendered control of the essentials – housing, water, energy, transport – and left people exposed to higher costs.”
He added: “If we want an economy and a country that works for all people and places – which to me should always be at the very core of Labourism – then it requires a new path to the one we’ve been on for the last 40 years.”
Burnham promises ‘a new economic model’ for UK
Andy Burnham has now finished his first speech as prime minister – outside the door of Number 10 Downing Street.
Burnham promised he would bring a “new economic model” to the UK.
“We will make this moment a circuit breaker for Britain, bringing forward the biggest changes in the last 40 years,” 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.”
Burnham railed against his generation of politicians which he said have disappointed Britain.
“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.”
Burnham to set out 10 year plan for UK ‘later this year’
Burnham is set to reveal a ‘10 year plan’ for the UK that will show how his government is set to bring about the new economic and political model he has promised.
He said: “Later this year, I will bring forward a new plan for Britain-a 10-year plan, laying out a path from where we are now to where I believe we all want Britain to be, wherever we're coming from, whatever party we support.”
Andy Burnham delivering his first speech as prime minister outside Number 10 Downing Street
Burnham: Cost of living support to be announced tomorrow
While a 10-year plan will be announced ‘later this year’, Burnham has promised that he will announce plans to bring forward cost of living support as soon as tomorrow.
In his first speech outside Number 10, Burnham said he wants to “give people some breathing space now. Some help with the cost of living. And I will set out some of those measures starting tomorrow, including how we pay for them.”
Burnham has not announced precisely what these measures will be, though we will likely find out tomorrow.
Burnham sets out his government's aims
Some of Burnham’s aims for his government were set out in his speech.
He said: “We will help more young people into work by changing the education system and giving them more support, more mental health support, and we will build more council homes.
“That is the fair and sustainable way to bring the welfare bill down to meet our fiscal rules and to honour our commitments on defence to our international partners.
“We will help people to live well, building a more preventative state, investing in people's success, rather than paying for failure, and that work starts now.”
Burnham pledges to stick to fiscal rules and defence commitments
Burnham’s speech reiterated his promise to maintain the previous government’s fiscal rules, which dictate how much the UK can borrow and spend.
This will be welcomed by many in the City as many worried that Burnham would throw these rules out after he said last year that the UK was “in hock to the bond markets”.
The UK has three main fiscal rules, but the most important is that the current budget should be on course to be in balance or surplus by 2029/30. This effectively limits how much the government can borrow.
In his speech, Burnham also confirmed that he will “honour our commitments on defence to our international partners.”
The Defence budget has been a point of controversy in recent months as former defence secretary John Healy resigned when Starmer failed to provide an extra £28 billion to fully fund the Defence Investment Plan.
Burnham: I will end rough sleeping in the UK
In his first major commitment as prime minister, Burnham has said he will end rough sleeping in the UK.
Concluding his speech, he said: “I will soon go through that door behind me and issue my first instruction to end rough sleeping in our country.
“It's about putting the right values and the right standards at the heart of government. I will put the care of people at the heart of everything I do.”
“I will give this my all, and I ask you all to pull with me. 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. Thank you very much, everyone.”
Andy Burnham has promised to end rough sleeping in the UK.
Rough sleeping has been a pet issue for Burnham since his time as Mayor of Greater Manchester. On the campaign trail in 2017, he promised to end rough sleeping in the city by 2020.
Burnham did not meet that target, but did make headway, bringing rough sleeping down by 57% between 2017 and 2020. However, from 2021 to 2025 it crept back up, with rough sleeping down just 26% on 2017 levels in 2025.
Burnham: ‘I will bring back hope’
Burnham has given his first speech before entering Number 10. This is what the new prime minister has promised:
• He will set out a 10 year plan for Britain ‘later this year’.
• In the meantime he will announce more cost of living support tomorrow (21 July).
• The government will help more people into work.
• The education system will be changed.
• More support will become available for young people, including for mental help.
• More council homes will be built.
• Rough sleeping will be ended in the UK.
• Defence commitments to international partners will be maintained.
• Decentralisation of power is key, with each postcode getting more power.
While we are yet to learn who will be in his new cabinet, the big question is how is Burnham going to pay for it all? Hiking taxes is one option. We have already heard rumours about a shake-up of the capital gains tax regime and a form of wealth tax has not been ruled out.
We can expect to hear more about his plans to offer support on cost-of-living issues tomorrow, “including how we pay for them”.
Who will be Burnham’s chancellor?
Burnham is expected to announce his cabinet shortly. While there are no official statements from Burnham on who his chancellor will be, rumours are circulating that there are a few top candidates for the job.
The front-runner at the moment is Shabana Mahmood, the current home secretary. This news came as a shock considering she has not held any economic position in her career.
Mahmood’s relative inexperience in economic briefs may also indicate that Burnham wants to run economic policy from Number 10.
This being said, insiders claim that Mahmood is one of the current cabinet’s most effective ministers and say that she may bring this effectiveness to the Treasury. Markets have not been spooked by the prospect of Mahmood as chancellor either.
Another potential candidate is Ed Miliband, the current energy secretary and former leader of the Labour Party. While he had previously been widely expected to become chancellor, his stock has fallen as it emerged that Mahmood was the front-runner.
Should Burnham ditch the triple lock?
One major challenge Burnham faces is the soaring cost of funding the state pension through the triple lock.
Keir Starmer vowed to not touch the mechanism, which sees the state pension increase every April by either the rate of inflation, average earnings growth or 2.5% – whichever is highest.
But the Office for Budget Responsibility estimates it will cost around £15.5 billion by 2030, up from the £5.2 billion originally estimated when it was first introduced.
Supporters of the triple lock say pensioners have worked for it their whole lives and the increase protects them from rising living costs.
But opponents suggest the policy will make funding the state pension more and more unaffordable as the UK’s population ages.
Andy Burnham needs to spell out the details of his fiscal plan now, says wealth manager
Nigel Green, group chief executive officer of wealth manager deVere Group, said Burnham needs to offer clarity now on his fiscal plan for the UK.
It comes following speculation he could increase capital gains tax rates while leaving the door open on a wealth tax and exit charge on departing assets.
Green said: “Every day this drags on without clarity is a day wealthy families and business owners are forced to plan for the worst rather than plan with confidence.
“Reports that he favours a fiscally cautious figure for chancellor gave markets some comfort this week, but speculation about personnel is not a substitute for a clear position.
“He needs to confirm his top team and, critically, tell the country what he intends to do with wealth, capital gains and exit taxation, because every week of silence pushes more capital toward the door.”
BREAKING: Rachel Reeves out as chancellor
Rachel Reeves has been sacked as chancellor as Andy Burnham begins building his cabinet.
In a statement on X (formerly Twitter), she said: “It has been the privilege of my life to serve as the Chancellor of the Exchequer.
“The economy today is stronger, fairer and more resilient because of the choices we have taken as a Labour Government over the past two years.
“Stability restored, investment delivered and reform to our economy under way. I said when I was appointed Chancellor that I would judge my time in office if the lives of ordinary working class people have been improved. I’m proud to say that they have.
“And to every young woman and girl let my time in office show there should be no ceilings on your ambitions, your hopes or your dreams.
“I wish the very best of luck to my successor, Andy and his cabinet. You have my full support, and I will continue to play my part in helping this Labour government deliver the change the country needs.”
Who else has left the cabinet?
Other notable Starmer loyalists who have left government include justice secretary and deputy prime minister David Lammy, as well as housing secretary Steve Reed.
Business secretary Peter Kyle and Richard Hermer, attorney general, have also both left the cabinet.
Meanwhile, Liz Kendall, science, innovation and technology secretary, has also been sacked.
Will Burnham end fiscal drag?
In an interview with The Times published this morning, Andy Burnham rejected the idea that he is simply a “tax raiser” and implied he may look at possibly increasing the personal allowance.
He said that while he was campaigning in Makerfield “one thing I heard most on the doorsteps [...] was frustration about the personal allowance, frozen at £12,570”.
He added that the recurring complaint that the tax burden on ordinary, working people is too high has been “lodged in [his] mind” ever since.
In the interview, he said figures in Westminster are “just characterising me as a tax raiser. Well, again, it’s never that simplistic, is it?”
Tax thresholds have been frozen at 2022/23 levels under successive governments – a process called fiscal drag. What was first intended as a temporary measure has been extended multiple times, most recently by Rachel Reeves in the 2025 Autumn Budget.
Thresholds typically have increased in line with inflation, but as they have been frozen more people are finding themselves ‘dragged’ into higher tax bands when their earnings increase.
Burnham to use 'any flexibility' in the fiscal rules to fund spending
Andy Burnham has said he will use “any flexibility” that exists within the UK’s self-imposed fiscal rules to help fund investment in infrastructure.
In a press conference, he said: "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.
"But we will stick to the existing rules and I've made that very clear in Downing Street. So none of this is about taking risks with the economy. I've never done that in any role that I've had."
The UK’s fiscal rules stop the government from borrowing excessive amounts of money with the budget required to be balanced or in surplus by the end of this parliament in 2029/30. Former chancellor Rachel Reeves tweaked these rules to allow greater borrowing in order to fund infrastructure investment in 2024.
In the press conference, Burnham said his policies will be fully funded and this will be “clearly set out in our budget.”
Burnham confirms he will look at reforming tax thresholds
In that same press conference, Burnham also elaborated on his comments to The Times this morning that he is looking at frozen tax thresholds.
Tax thresholds have been frozen at 2022/23 levels, dragging more people into higher tax brackets. This includes the tax-free personal allowance of £12,570.
He said: “I think [tax thresholds have] been frozen now, hasn’t it for a number of years, so it has dragged more people in… and that particularly has become a growing issue. So all of this will be looked at though at the budget, and obviously it’s difficult given the financial circumstances in which we find ourselves.
“I have a visibility of the issue and the impact it’s had on the different groups that I’ve mentioned, but it’s difficult because changing the threshold is not without significant consequences. But I’m looking at it,” he said.
Tax thresholds were frozen again under Keir Starmer. Will Andy Burnham raise them?
Burnham pledges council house building blitz
A major part of Andy Burnham’s plan for the country is to build more council houses.
In his first speech as leader of the Labour party on 17 July, he said he wants to oversee the “biggest council house building programme in the post-war era.
He reiterated this in his first speech as prime minister this morning, saying: “We will build more council homes”.
As local authorities are in charge of the building and maintenance of council homes, the pledge to build more will require more money diverted from central government to local councils.
Burnham has pledged to build more council homes – but where will the money come from?
BREAKING: John Healey appointed chancellor
Former defence secretary John Healey has been appointed chancellor of the exchequer by Andy Burnham.
Healey has experience working in the Treasury – he was economic secretary to the Treasury from 2002 to 2005 and financial secretary to the Treasury from 2005 to 2007 under Gordon Brown.
He was also secretary of state for local government from 2007 to 2009, which Burnham may see as a positive considering he plans to give more power and money to local authorities.
Healey notably resigned from the government last month after Keir Starmer refused to give the ministry of defence an extra £28 billion to fully fund the Defence Investment Plan.
The move comes as a surprise as home secretary Shabana Mahmood or former energy secretary Ed Miliband were heavily rumoured to take up the position.
John Healey is Britain's latest chancellor
That's all from the MoneyWeek team today. Look out for your emails as we will bring you more this week, with analysis on what Burnham means for your money. Have a pleasant evening.