Andy Burnham names John Healey as chancellor in first major reshuffle appointment – UK politics live

John Healey has been named chancellor in Andy Burnham’s first Cabinet appointment.

Healey resigned as defence secretary last month, in protest at Keir Starmer’s defence investment plan.

Our political editor Pippa Crerar writes:

Burnham’s team were clear they want an experienced figure to deliver his vision for UK economy – combining fiscal responsibility with focus on re-industrialisation, devolution, cost of living crisis and driving growth.

Healey quit cabinet last month accusing Keir Starmer and Rachel Reeves of putting the UK’s security at risk, saying defence investment plan fell well short.

He will now be responsible for finding the money to raise military spending to 3% by 2030. Could he opt for defence bonds to do so – which he argued for from MoD – even though it was dismissed as extra borrowing.

Former deputy prime minister Angela Rayner has gone into No 10.

She has widely been expected to make a comeback in a big cabinet role.

The secretary of state for culture, media and sport Lisa Nandy has just entered No 10.

There have been rumours she could be moved to the housing brief.

As expected, Louise Haigh has been named as Andy Burnham’s first secretary of state, chancellor of the Duchy of Lancaster and minister for the Cabinet Office.

Haigh left her post as transport secretary under Keir Starmer in 2024 and has been planning Burnham’s ascent to power since last year.

The former foreign secretary Yvette Cooper has also entered No 10 – shortly before Ed Miliband was appointed to that role.

More on her future as we get it.

Shabana Mahmood will remain in her role as home secretary, it has been confirmed.

Ed Miliband has been named foreign secretary in Andy Burnham’s cabinet.

Pat McFadden, the secretary of state for work and pensions, has just gone into No 10.

He is very much seen as close to former prime minister to Keir Starmer, so his inclusion in Burnham’s cabinet further reinforces the new prime minister’s pledge to bring in all factions of the Labour party.

The departure of Europe minister Nick Thomas-Symonds, will be a blow to EU counterparts who were hoping he would remain in post in Andy Burnham’s new cabinet.

Only last week the outgoing EU ambassador to the UK Pedro Serrano heaped praise upon him for helping to heal the tattered pre-Brexit relationship with the EU.

But some EU diplomats complained that Keir Starmer’s bid to “reset” that relationship had lost momentum with no deal in site for youth mobility in particular, in a row over tuition fees for EU citizens.

However, UK sources were frustrated with the EU’s insistence on home fees for EU citizens wishing to study in the UK, expressing concern they did not understand the financial pressure that would pose for some cash-strapped British universities.

The Guardian’s political editor Pippa Crerar is reporting that Louise Haigh, a key Burnham ally who is currently inside No 10, is set to be appointed the chancellor of the Duchy of Lancaster.

On X, she wrote:

I’m hearing that Louise Haigh, Andy Burnham’s right hand woman, will be Chancellor of the Duchy of Lancaster, running a beefed up cabinet office that will be the “political engine room” driving the PM’s agenda.

She will *also* be first secretary of state, a role held in previous govt by George Osborne, William Hague & Pater Mandelson.

The last & only woman to hold the role was Barbara Castle, who Haigh has said in the past is her political hero.

Nick Thomas-Symonds is out as paymaster general and Cabinet Office minister, saying he is returning to the backbenches.

In a letter to prime minister Andy Burnham, he said: “I will support the new team of ministers from the backbenches and continue to serve the people of my home constituency of Torfaen, who, as always, remain my top priority.”

John Healey has been named chancellor in Andy Burnham’s first Cabinet appointment.

Healey resigned as defence secretary last month, in protest at Keir Starmer’s defence investment plan.

Our political editor Pippa Crerar writes:

Burnham’s team were clear they want an experienced figure to deliver his vision for UK economy – combining fiscal responsibility with focus on re-industrialisation, devolution, cost of living crisis and driving growth.

Healey quit cabinet last month accusing Keir Starmer and Rachel Reeves of putting the UK’s security at risk, saying defence investment plan fell well short.

He will now be responsible for finding the money to raise military spending to 3% by 2030. Could he opt for defence bonds to do so – which he argued for from MoD – even though it was dismissed as extra borrowing.

Volodymyr Zelensky welcomed Andy Burnham’s assurance that the UK’s support for Ukraine would remain strong.

After speaking with the new PM, the Ukrainian president wrote on X: “I was happy to speak with Andy Burnham and congratulate him on taking office as Prime Minister of the United Kingdom.

“I truly appreciate that the support for Ukraine and our people will remain steadfast. Thank you for your warm words of respect for the Ukrainian people and for your condolences to the families and loved ones of those killed in Russia’s recent attacks.

“Ukraine and the United Kingdom have built the strongest partnership in the history of relations between our two countries, and we will certainly continue working to expand it even further.

“We agreed to discuss our future cooperation, including our work within the Anti-Ballistic Coalition, during a meeting in the near future. Thank you, Andy. Thank you, Britain!”

Northern Ireland secretary Hilary Benn has announced he is leaving the role.

In a statement on X, Benn said: “It has been a great privilege to serve as Secretary of State for Northern Ireland and to work with the many wonderful people I have met over the last 2 years.

“I wish my successor all the very best in working with the Executive to protect stability, continuing to generate growth and investment and in taking forward the Troubles Bill which is so important for so many families.

“The Prime Minister will have my full support from the backbenches.”

Foreign Office minister Baroness Jenny Chapman of Darlington said she is leaving the government, as she said cutting the aid budget had been “challenging” and required “much soul searching”.

Chapman said: “It’s been a great honour to serve as international development minister, and in Keir Starmer’s cabinet.

“I’m disappointed to be leaving but wish the Prime Minister and his new team every success.

“Cutting the aid budget has been challenging and has required much soul searching, but I passionately believe thanks to the work we’ve done, we’re spending the money better than ever before.

“We have a modern strategy and approach, working in partnership with developing countries rather than in a paternalistic way, and keeping strong commitments on global health and humanitarian aid.”

She added: “The UK is once again a force for good internationally.”

Andy Burnham told US president Donald Trump this afternoon he hoped to show him what Manchester had to offer during a visit in the future.

A Downing Street spokesperson said: “The Prime Minister began by congratulating the President on a successful World Cup and agreed that England had an excellent tournament.

“The Prime Minister also hoped that he would be able to show the President what Manchester had to offer during a visit in the future.

“Setting out his vision as Prime Minister of the United Kingdom, the Prime Minister said he would be focused on ensuring reindustrialisation up and down the country to ensure good growth in every postcode.

“The Prime Minister also underlined his commitment to defence and security and said ensuring the security of the UK and its Allies was at the top of his agenda.

“The President then updated on the situation in the Middle East, and the Prime Minister outlined the UK’s commitment to securing the movement of shipping in the Strait of Hormuz to support global supply chains and drive down costs for businesses and families across the country.”

The UK government’s borrowing costs are edging higher on financial markets as investors react to Andy Burnham’s cabinet reshuffle and early hints over his tax and spending plans.

After Rachel Reeves announced her resignation as chancellor as the new prime minister puts together his government team, the yield – in effect the interest rate – on 10-year UK debt rose by about 0.08 percentage points to trade above 5%.

The pound also fell against the US dollar and the euro, on a volatile day in global markets amid escalating tensions in the Iran war.

As the Middle East conflict intensifies, investors point out that yields are rising everywhere. However, the UK is seeing a bigger increase, with investors on high alert for any clues over Burnham’s plan for power.

Burnham telling reporters in the Downing Street garden that he could consider utilising “flexibility” in the fiscal rules to bolster public investment are being read by some investors he could ramp up borrowing. The new PM also hinted he could consider raising the tax-free personal allowance – a change that would have big fiscal costs.

“I’ve said we’ll stick to the fiscal rules, and by that I mean the existing fiscal rules, and use obviously any flexibility within them,” Burnham told reporters.

Retaining the self-imposed borrowing and debt constraints drawn up by Reeves has been seen as key to avoiding a backlash in markets. However, with spending pressures looming, Burnham’s appointment for chancellor could be forced to consider tax increases or other measures to help finance the new prime minister’s agenda for the economy.

It is worth pointing out the moves in financial markets remain relatively small compared to other big volatile days. After Liz Truss’s mini budget in September 2022, long-dated UK government bond yields rose by more in four days than the annual increase in 23 of the past 27 years.

Things could also change quickly. Reeves – who was a reassuring presence for City investors – may have gone, but Burnham’s new pick as chancellor has yet to be announced. There are also no firm policy announcements to pore over, which will be of significantly more importance than any offhand comments to reporters.

Still, bond markets are finely poised and will begin moving before firm details materialise. Many investors are also expecting Burnham to run a looser approach to the public finances than Starmer and Reeves.

Shabana Mahmood and Ed Miliband are walking along Downing Street and enter No 10 together.

The past few weeks have been rife with speculation that one or the other will become chancellor.

The wait to find out which will be appointed chancellor goes on. But reporting in recent days appear to suggest Mahmood to the Treasury, with Miliband for the Foreign Office.

Right, I’m going to take a short break but my colleague Nadeem Badshah will be keeping you abreast of developments over the next hour or so.

Darren Jones, the chancellor of the Duchy of Lancaster, has confirmed he too is out of Andy Burnham’s cabinet.

Another close Starmer ally, Jones wrote on X:

From the campaign trail and the TV studios to the Treasury, No10 and the Cabinet Office – it’s been a privilege to be in the cabinet of a Labour government and to serve the country.

Andy Burnham has called to tell me I won’t be a part of his new cabinet. I wish him and his team every success.

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