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Andy Burnham’s Cabinet has met at Downing Street for the first time, after the Prime Minister was hit with a shock Labour attack on his first day in office.
The new leader earlier announced that VAT will be removed from household electricity bills in a cost-of-living boost to millions.
The tax cut, taking the rate from 5% to 0%, will come into force on October 1, the new Prime Minister said on Tuesday morning. The government said this will be funded by scrapping Sir Keir Starmer’s digital ID scheme.
However the move came in for harsh criticism from Darren Jones, who was sacked on Monday as chief secretary to the prime minister.
He said the Digital ID scheme was “unfunded”, adding: “The government will have to set out how it will pay for its new policies at the budget. It comes as Mr Burnham prepares to chair the first meeting of his newly-appointed Cabinet.
The new premier promised to provide early “breathing space” for households struggling with the cost of living in his first address to the nation as PM on Monday.
On Monday evening, he made sweeping changes to the Cabinet, starting with the appointment of John Healey as the new Chancellor to succeed Rachel Reeves.
A swathe of major figures from Sir Keir’s era joined Ms Reeves in leaving Government, including ex-deputy prime minister David Lammy, former attorney general Lord Hermer and former housing secretary Steve Reed.
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Scottish Labour leader Anas Sarwar to be made a minister
Scottish Labour leader Anas Sarwar is to be made a peer and appointed as a minister in Andy Burnham’s Government, sources say.
Anas Sarwar 'set to quit as Scottish Labour leader to be a minister in Burnham's goernment'
Anas Sarwar is set to quit as Scottish Labour leader to be a minister in Andy Burnham’s Government, according to reports.
Mr Sarwar will be elevated to the Lords to take up a ministerial post at the revamped Department for Business, Innovation, Science and Trade, headed by Jonathan Reynolds, according to media including the Scottish Sun.
The Scottish Labour leader called for Sir Keir Starmer to step down as prime minister in February.
He hailed successor Mr Burnham for his “bold Labour vision” as he entered No 10 this week.
Former Greater Manchester mayor Mr Burnham appointed his Cabinet on Monday after taking office, but a raft of ministerial appointments are still to come.
Mr Sarwar has been Scottish Labour leader since 2021.
Anas SarwarGettyCivil servants already working at Manchester base says Downing Street
Civil servants are already working at Andy Burnham’s new Manchester-based No 10 North, which will cost taxpayers no extra money, Downing Street has said.
The Prime Minister’s official spokesman told reporters: “Staff are already working in the new No 10 North. This includes staff from Manchester and those who have come in from around the country.
“It is based at existing UK Government offices in Central Manchester and you can expect more updates in due course.”
The official also said: “The running of No 10 North will be covered by existing Cabinet Office budgets. There is no additional cost to taxpayers.”
On the question of relocation packages for London-based personnel to move there, he said it is “standard practice” for employers to support staff required to relocate.
The spokesman said numbers would be detailed in due course, adding: “We already have around 80,000 civil servants based in the North West of England, with around 700 roles moved from London to Manchester” last year.
Mr Burnham “expects to work from No 10 North at least one day a week,” his spokesman said, while caveating that his diary could change depending on the business of Government.
British Gas says it is 'encouraging' to see the new PM move quickly on energy bills
The boss of British Gas owner Centrica said it is “encouraging to see the new Prime Minister move quickly” to cut household energy bills after announcing an £850 million cut to VAT on electricity bills.
Chris O’Shea, group chief executive of Centrica, said: “Any reduction in bills will be welcome news for customers and it’s good to see affordability being made a priority from day one.
“We will, of course, be passing this reduction on to our customers.
“We’ve been clear for a long time that help should be targeted at those who most need it.
“We continue to believe that the most sustainable solution would be a targeted social tariff to support vulnerable households, and we look forward to helping the Government deliver that at the earliest possible opportunity.”
Chris O’Shea is chief executive of British Gas owner Centrica PA ArchiveBurnham's conversation with Trump was 'very warm', No10 says
Andy Burnham’s conversation with Donald Trump was “extremely warm” and lasted around 20 minutes, Downing Street has said.
The Prime Minister’s spokesman told reporters: “It was an extremely warm call and I think that’s reflected in both sides’ read-outs.”
Burnham pictured with his Cabinet todayAFP/GettyBurnham's plan to cut VAT is 'fully funded' says No10
Downing Street has insisted Andy Burnham’s plan to cut VAT from electricity bills is fully funded.
The Prime Minister’s official spokesman said: “It’s fully funded and will come into effect from October the first, and it applies and is funded for this financial year.”
The Government previously said the £1.8 billion cost of the digital ID scheme over three years had been “scored” by the Office for Budget Responsibility, meaning the money would have had to be found.
The spokesman was asked about the scoring of the digital ID programme and which funding is to be shifted from it for the VAT cut, as the Office for Budget Responsibility previously said that money for digital ID still needed to be found.
Put to him that the cut was being funded through unidentified savings, he said: “What we’re doing is we’re funding this through the cancellation of the digital ID programme.
“Departments were going to have to fund the Digital ID programme through their existing budget reprioritisation.
“Departments will now direct these savings towards this.”
Ed Miliband takes call with Ukraine
Ed Miliband’s first diplomatic call as Foreign Secretary was with his Ukrainian counterpart, he has said.
“I underlined the UK’s steadfast and resolute commitment to the people of Ukraine,” the new Foreign Secretary wrote on X.
The former Labour leader also said: “Ukraine is on the frontline of the fight for the values of freedom and democracy in Europe.”
Andrii Sybiha, Kyiv’s acting minister of foreign affairs, wrote on social media that he congratulated Mr Miliband on his new role “and thanked the United Kingdom for its steadfast support for Ukraine since the first days of Russia’s full-scale invasion, including military, energy, humanitarian, economic and sanctions assistance”.
Mr Sybiha added: “I briefed my colleague on the latest developments on the battlefield and thanked him for his solidarity following Russia’s latest massive attack on Kyiv. We discussed further strengthening our cooperation, continued military assistance, support for Ukraine’s energy sector ahead of winter, increasing pressure on Russia.
“I invited Foreign Secretary Miliband to visit Ukraine. I wished him and his team every success in their important work and look forward to working closely together to further strengthen the vital Ukraine–UK partnership.”
A Foreign Office spokesperson said their call showed the Government’s “commitment to continue to stand shoulder to shoulder with the people of Ukraine, as Britain has done for the last four years”.
Foreign Secretary Ed Miliband used his first diplomatic phone call to speak with his Ukrainian counterpart PA WireStreeting says government making 'bold' commitments to the country
Defence Secretary Wes Streeting insisted the Government was making “bold” and “credible” commitments to the country, after former minister Darren Jones cast doubt on the funding for Andy Burnham’s plans to cut VAT on energy bills.
Asked for a response to Mr Jones, the Defence Secretary said: “I’ve been immersed in the Ministry of Defence today, so you’ll forgive me if I haven’t seen in detail comments made by Darren Jones.
“What I can say, having come here straight from Cabinet this afternoon, is that what you will see and hear from this Prime Minister and Chancellor, both in the current coming days, months, and years, is a commitment to be both bold and also credible.
“Where we’re making commitments to the country, it’s because they’re affordable, and we will set out how those things will be funded.
“Darren Jones was a good colleague, served this country well, and I certainly look forward to working with him regardless of where he happens to sit in the House of Commons chamber.”
Defence Secretary Wes Streeting attends the Global Combat Air Programme (GCAP)GettyDefence department must show taxpayers' money is 'well spent', Streeting says
Wes Streeting has said his new department must show it does not ask for taxpayers’ money to fund defence “lightly”.
Speaking at a press conference, the Defence Secretary said: “The commitment that the Prime Minister has given to the defence of our nation is clear and will be even more clear in the coming months.
“I’m absolutely delighted that my friend and predecessor John Healey has taken on the challenge of Chancellor of the Exchequer and his position on defence investment is on the record, as is mine.
“We have responsibility, I think, at the Ministry of Defence to demonstrate that every penny of taxpayer money that’s invested in defence is necessary and well spent, to show that we understand the sacrifices that involves from other Government departments, in terms of opportunity costs of other things we might fund.
“But also to taxpayers, whether individuals or businesses that are feeling hard-pressed, we don’t take the contribution they make lightly and we don’t make this ask of the country lightly either.”
Mr Streeting said defence sector “opportunities for this country are enormous”.
Defence Secretary Wes Streeting arrives at the Global Combat Air Programme (GCAP), at Wellington Barracks in London. Picture date: Tuesday July 21, 2026.PAWho is Louise Haigh? Burnham's second in command
Louise Haigh has been handed the job of First Secretary of State - the highest-ranking Cabinet post after the Prime Minister.
This means she will be responsible for standing in for Burnham when he is away for events, such as Prime Minister’s Questions.
She was also named Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office.
But who is Louise Haigh? Here’s everything we know about the Sheffield Heeley MP.
Who is Louise Haigh? Comeback queen is Burnham's Cabinet enforcer
Louise Haigh has been handed the job of First Secretary of State - the highest-ranking Cabinet post after the Prime Minister
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