Andy Burnham has appointed John Healey as Chancellor, replacing Rachel Reeves, following much speculation over who will head the Treasury.
Sir Keir Starmer’s former Defence Secretary was not in the shortlist for the role, with Energy Secretary Ed Miliband and Home Secretary Shabana Mahmood being the main frontrunners.
Mr Healey famously resigned from his role under the former Prime Minister on principle after a stand-off between himself and Ms Reeves over a lack of funding for defence.
Notably, he served as Financial Secretary to the Treasury under ex-PM Tony Blair’s Government between May 2005 and June 2007, having been the department’s Economic Secretary between May 2002 and May 2005.
Prior to entering politics, the new Chancellor worked as a journalist and then as a disability rights campaigner, before working in comms and activist roles for trade unions and other organisations.
Disability benefit spending has been a lightning-rod issue for Labour since the party returned to power in July 2024, with Ms Reeves failing to push through cuts in the face of backlash from backbench MPs.
Mr Burnham has promised devolution will be the central policy agenda for his administration, which could see more tax and spending powers granted to regional Governments.
In his inaugural address, the new Prime Minister said: “We will take power out of here and carry it into every postcode in the land so that they can do more,” Burnham said in his inaugural speech outside Downing Street.”
Mr Burnham shared he would set out a 10-year plan for the country in the months ahead, which will include cost of living measures, but will give the British public “breathing space now”.
He 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.”
Danni Hewson, head of financial markets at AJ Bell, said: “So far there’s been relatively little by way of policy for investors to get their teeth into, although Mr Burnham’s first speech as PM did promise huge changes with some cost of living breathing space to be unveiled as soon as tomorrow.
“The big question is how his government will fund the changes, particularly amid a backdrop of geopolitical instability and high levels of national debt.
“Rachel Reeves’ post announcing she was leaving her job as Chancellor did make more of a ripple. Gilt yields edged higher in late trading as investors waited to discover which of the runners and riders would take over as Chancellor.”
Kevin Mountford, personal finance expert and co-founder of Raisin UK, added: “The appointment of John Healey as Chancellor gives Andy Burnham an opportunity to signal whether his promise of change extends to the Government’s economic approach, rather than simply its personnel.
“The private sector has borne the impact of decisions that have increased costs and weakened confidence. Businesses will therefore be looking for a Chancellor who understands commercial realities, values entrepreneurship and recognises that sustainable public finances ultimately depend on a healthy, growing private sector. Ideally, that would include meaningful experience beyond Westminster.”
