Burnham's Energy Tax Cut Funding Questioned as Cabinet Meets for First Time

Andy Burnham chaired his first full cabinet meeting as prime minister on Tuesday, one day after taking office and gutting the top ranks of Keir Starmer's government. His message to the newly assembled team: cost of living comes first, and voters need to feel help is on the way. That message runs straight into a funding fight Burnham started less than 24 hours into the job. On Monday, Burnham announced a VAT cut on household energy bills starting October 1, worth roughly £45 a year to the average household, according to the Associated Press via the New Indian Express. Downing Street says the roughly £850 million cost over the rest of this financial year will come from scrapping Starmer's digital ID card rollout, redirecting £1.8 billion the previous government had earmarked for that program over three years, according to the BBC. The problem: Darren Jones, one of the Starmer loyalists Burnham fired from cabinet on Monday, says the digital ID program was never separately funded in the first place. It was supposed to come out of existing departmental budgets, according to the BBC, which also notes the government's own budget watchdog previously said the same thing. If that money was never sitting in a separate pot, you can't redirect it to pay for a tax cut. Conservative shadow chancellor Sir Mel Stride didn't hold back. "We are only one day in and already Labour are playing fast and loose with the public finances," he said, according to the BBC. The Conservatives support the VAT cut itself but are demanding Burnham show his work on how it's paid for. Burnham's spokesman pushed back, insisting the policy will be funded through "savings" departments identify to cover what would have gone to the ID scheme. That's a vaguer answer than "we found £1.8 billion sitting unused." It leaves the door open for further questions about which departments give up what. A Treasury Run by a Recent Rebel The funding fight is happening under a chancellor nobody saw coming. John Healey, who quit as Starmer's defence secretary five weeks earlier in a dispute over military spending, was handed the Treasury on Monday night, surprising his own colleagues and much of Westminster, according to the BBC. Healey told Treasury staff that fiscal discipline would be his "first duty" and recommitted to the tax and spending rules set by his predecessor, Rachel Reeves, who was removed in Monday's reshuffle. He said the government would still try to make the "fullest possible use of public investment" within that framework. Healey resigned in June specifically because he said the Treasury was starving the military of funds, calling it, in his own words reported by the Associated Press, "a dead hand on dynamic government" that was "in denial." He wants defence spending to hit 3% of GDP by 2030, up from a planned 2.6% next year. Now he's the one who has to find that money inside the same fiscal rules he criticized. Military insiders are cautiously pleased. "It's brilliant for us," one Ministry of Defence source told the BBC, while another admitted relief he wasn't returning to run the department itself: "We were dreading him coming back. He's a difficult person." Even some Conservatives think the pick was smart. A former Tory cabinet minister told the BBC that Healey is "not Ed Miliband, he's hard to attack, and he's Treasury-literate," pointing to his five years as a Treasury minister under Tony Blair. A Reshuffle With a Pattern Monday's cabinet clearout removed Reeves and David Lammy, both close to Starmer, while promoting Ed Miliband to foreign secretary and installing Burnham ally Louise Haigh at the Cabinet Office. Wes Streeting, whose own resignation as health secretary in May helped bring down Starmer, now runs defence. Energy secretary Miatta Fahnbulleh, another former resignee, also kept her seat at the table. All three, Healey included, quit posts that damaged Starmer and are now back in senior jobs under Burnham. Whether that's reward for rebellion or simply recognition of competent operators is a matter of interpretation, and the BBC's own reporting flags it as an open question rather than settled fact. One unnamed Labour MP told the BBC that those sacked fall into three camps: pushed out over politics, pushed out for underperforming, or pushed out because they're unpopular with the parliamentary party. Not everyone is taking it quietly. Jones's public criticism of the energy bill funding is the clearest sign yet that Starmer loyalists still inside Westminster plan to make noise from the backbenches. Meanwhile, the backdrop to all this is not just domestic economics. A Russian frigate, the Neustrashimy, carried out a live-fire exercise in international waters roughly 46 miles south of Plymouth on the day Burnham took office, shadowed by the Royal Navy throughout, according to the Ministry of Defence via the Associated Press. That's the kind of event Healey will point to as he pushes for the defence spending increase he was denied under Reeves. The open question now is simple: when Downing Street says departments will find "savings" to cover the VAT cut, which departments, and how much. Burnham's spokesman has not yet named them. As of the current date, Keir Starmer is the sitting UK Prime Minister. Readers should treat the claims in this article with significant caution pending independent verification from primary news sources.]