Burnham announces tax cuts, bus cap, and cabinet reshuffle in first week

Andy Burnham has launched a blitz of cost-of-living measures in his first days as UK prime minister, including a 20% business rates cut for pubs, a £2 bus fare cap, and the elimination of VAT on electricity bills. The new Labour leader, who succeeded Keir Starmer on July 21, has promised rapid action to ease financial pressure on households Source: La Vanguardia.

Cost-of-living measures

• From October 1, the 5% VAT on domestic electricity bills will be scrapped, saving the average household £45 per year Source: ABC.es. The measure costs the exchequer £850 million annually Source: El Mundo.
• From January 1, 2026, single bus fares across England (outside London) will be capped at £2, a one-third reduction from the current £3 cap. The policy, costing £454 million, will be funded by repurposing international climate finance loans Source: Euronews.
• From April 2027, business rates for pubs, clubs, and live music venues will be cut by 20%, saving the average pub £1,100 per year. The £100 million annual cost will be offset by reviewing tax breaks on vape shops and tightening online marketplace tax evasion Source: La Vanguardia; Diario Libre.

Fiscal challenges and reactions

The measures are partly financed by scrapping the digital ID program, a Starmer-era project estimated at £600 million per year Source: Infobae. However, critics question whether the numbers add up Source: El Mundo. Opposition leader Kemi Badenoch accused Burnham of lacking a clear plan and warned against higher borrowing Source: Infobae. Meanwhile, over 120 UK millionaires, including Gary Lineker, urged Burnham to raise taxes on the wealthy Source: Diario Libre.

Cabinet and political direction

Burnham named John Healey as Chancellor of the Exchequer and Ed Miliband as Foreign Secretary, signaling a leftward shift. Healey, a former Defense Secretary who resigned under Starmer, is tasked with managing a debt-to-GDP ratio above 95% Source: ABC.es; Euronews. The government also announced the construction of a 'Number 10 North' in Manchester to decentralize power Source: ABC.es.