Healey named Chancellor as Burnham clears Cabinet – Daily Business
John Healey is installed at the TreasuryJohn Healey has been named Chancellor after Rachel Reeves was sacked and refused another Cabinet post. The former Defence Secretary resigned from Sir Keir Starmer’s. . .
John Healey is installed at the TreasuryJohn Healey has been named Chancellor after Rachel Reeves was sacked and refused another Cabinet post. The former Defence Secretary resigned from Sir Keir Starmer’s Cabinet over spending allocated to his department, and will now return in the most high profile role after the Prime Minister. He leapfrogged Energy Secretary Ed Miliband and Home Secretary Shabana Mahmood who were heavily tipped for the role. Mr Miliband was unpopular with the markets, while Ms Mahmood’s experience in financial and economic affairs were questioned. Mr Miliband was moved to Foreign, replacing Yvette Cooper, while Ms Mahmood retains her job. Mr Healey is expected to be involved in announcing new measures tomorrow to tackle the cost of living and will be central to the new tax measures Mr Burnham is keen to develop ahead of the autumn budget. Burnham campaigner Lousie Haigh is back in the prime minister’s top team, serving as First Secretary of state and Chancellor of the Duchy of Lancaster. She resigned as Transport Secretary in November 2024 after it emerged she pleaded guilty to a fraud offence a decade ago. The number of sacked ministers reached almost a dozen as Mr Burnham shaped his new team. Eight full cabinet ministers were axed: Ms Reeves, David Lammy (foreign), Liz Kendall (science and technology) Peter Kyle (business), Hilary Benn (Northern Ireland), Jo Stevens (Welsh), Darren Jones (PM’s Office) and Steve Reed (housing). Lord Richard Hermer is no longer attorney general. Lord Vallance resigned as science minister. He was the former chief scientific adviser who played a key role in the government’s response to the Covid pandemic and was regarded by the scientific community as being close to developing science policy. His main achievement was to align that extra spending with the government’s growth agenda. The appointment of Mr Healey came after the close of the London equity markets, though gilt yields edged higher in late trading as investors waited to discover which of the runners and riders would take over. Nigel Green, chief executive of financial adviser deVere said: “Markets rallied recently on the assumption that a fiscally-cautious figure would sit between Burnham and his own instincts on tax. This theory no longer holds. Investors should reprice UK assets with that in mind. ”Mr Green pointed to Mr Healey’s record as the clearest signal of where pressure is now headed. “Healey resigned from Cabinet last month demanding more money for defence and has pushed for spending to reach 3% of GDP by 2030. “He now runs a Treasury under a Prime Minister who has ruled out raising income tax, VAT and National Insurance. That spending has to be funded somewhere, and wealth, capital gains and property are the obvious remaining options. ”Louise Hellem, chief economist at the CBI, said: “High energy costs and rising employment costs continue to act as a brake on growth, and we encourage the new administration to engage with the CBI’s proposals to tackle these issues. “Firms will also be looking for a review of the tax and regulatory system to ensure that it rewards investment and growth, rather than simply mounts further costs on hard-pressed businesses. “The acid test for every major economic decision in the months ahead should be simple: will it make it easier for businesses to invest, hire, innovate and grow?“Ultimately, tackling the cost-of-living crisis goes hand in hand with tackling the cost of doing business. If the government wants higher employment, lower inactivity and stronger public finances, it must create the conditions that give firms confidence to invest, expand and create jobs. ”Burnham plans public control in remodelled Britain