Andy Burnham purges Starmer loyalists in major cabinet reshuffle
Prime Minister Andy Burnham has restructured the government following his succession, appointing a new cabinet and confirming plans to tackle the cost of living.
Andy Burnham officially assumed office as the United Kingdom’s Prime Minister on Monday, 20 July 2026, following the resignation of Sir Keir Starmer. The transition, which sees the former Mayor of Greater Manchester become the country's seventh prime minister in a decade, followed a period of internal pressure within the Labour Party. Standing outside 10 Downing Street, Mr. Burnham promised a "circuit breaker for Britain," pledging to decentralise power away from Westminster and focus on domestic priorities including public service reform and the cost of living.
The transition was accompanied by a major restructuring of the government. Mr. Burnham conducted a purge of ministers associated with the previous administration, with more than nine individuals departing the frontbench. High-profile exits included Chancellor Rachel Reeves, Deputy Prime Minister David Lammy, and Chief Secretary to the Prime Minister Darren Jones. Peter Kyle also left the government, while former attorney general Lord Richard Hermer confirmed he would move to the backbenches to support the new leadership. Steve Reed, the former housing secretary, departed the government after expressing his desire to return the loyalty he felt he had been shown by the previous administration.
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In their place, the new Prime Minister appointed a cabinet that signals a shift in both personnel and priority. John Healey has been appointed Chancellor of the Exchequer. The appointment is considered notable, given that Mr. Healey previously resigned from the government following disagreements regarding defence spending. Ed Miliband has been named Foreign Secretary, a role in which he is expected to prioritise climate objectives and oversee a roadmap for international aid spending. Louise Haigh, described as a key strategist in Mr. Burnham’s political ascent, returns to government as First Secretary of State, Chancellor of the Duchy of Lancaster, and minister for the Cabinet Office.
Angela Rayner has returned to the frontline as Housing Secretary. She previously resigned from the same post, along with her roles as deputy leader and deputy prime minister, during the previous administration. Other key appointments include Yvette Cooper, who moves to the Department for Health and Social Care. Shabana Mahmood retains her position as Home Secretary, while Pat McFadden remains in his post overseeing welfare spending and the state pension.
The government moved immediately to implement its economic agenda. On Tuesday, 21 July 2026, the administration confirmed the removal of VAT from energy bills, a policy intended to provide households with what the Prime Minister termed "breathing space." To facilitate this, the government has cancelled the digital ID scheme initiated under the previous administration, with the Prime Minister’s office stating that resources will be redirected toward cost-of-living concerns. Mr. Burnham has also announced a fund to address rough sleeping.
Future policy directions remain under review. Mr. Burnham has indicated an openness to adjusting capital gains tax rates to align with income tax bands and has discussed the potential replacement of inheritance tax with a "national care levy" to fund a National Care Service. Reports suggest the government may look to bring forward recommendations from the Casey Commission on social care to the end of the current year. Additionally, the Prime Minister has signaled a willingness to re-examine employer national insurance increases introduced in the 2024 budget, though he has stopped short of committing to a reversal.
The shift in leadership has been met with caution by financial markets, with the British pound seeing slight movement as investors await further details on the government’s fiscal trajectory. Mr. Burnham has reaffirmed the United Kingdom’s commitments to NATO and support for Ukraine, while emphasizing the importance of cooperation with international partners. The new Prime Minister faces the challenge of balancing these international responsibilities with high public expectations for improvements in healthcare, housing, and regional investment.
Cabinet Appointments
- John Healey: Chancellor of the Exchequer
- Ed Miliband: Foreign Secretary
- Angela Rayner: Housing Secretary
- Shabana Mahmood: Home Secretary (retained)
- Yvette Cooper: Health and Social Care
- Pat McFadden: Welfare and State Pension (retained)
- Alex Norris: Justice Secretary
- Ellie Reeves: Attorney General
What to Watch Next
- Social Care Reform: Potential acceleration of the Casey Commission’s recommendations to the end of 2026.
- Taxation: Whether the government proceeds with aligning capital gains tax with income tax bands or adjusts the mansion tax threshold.
- Transport: Possible expansion of the local bus fare cap model to a national level.
- Fiscal Strategy: Decisions regarding employer national insurance and the potential for a new wealth tax or national care levy.
