Andy Burnham becomes UK Prime Minister, pledges 'cost-of-living government' amid policy debate

Andy Burnham has become the new UK Prime Minister, taking office on July 20, 2026, after replacing Keir Starmer as the leader of the Labour Party. Upon entering 10 Downing Street, Burnham immediately pledged to lead a "cost-of-living government," aiming to provide relief for households struggling with high expenses. This marks him as the seventh prime minister in a decade for the UK, with his appointment occurring through an internal party leadership contest rather than a general election.

In one of his first significant policy announcements, Prime Minister Burnham unveiled plans to eliminate VAT on electricity bills starting October 1, 2026. This measure is projected to save the average household approximately £45 annually and is intended to offer immediate "breathing space" during the ongoing cost-of-living crisis. The government stated that the initial cost of this tax cut, estimated at £850 million for 2026-27, will be funded by scrapping the Digital ID program.

However, the funding mechanism for the VAT cut has already sparked debate, with former Chief Secretary to the Prime Minister, Darren Jones, questioning how the policy would be paid for, noting that the Digital ID project itself was unfunded. Burnham has also outlined broader goals for his premiership, including a commitment to end rough sleeping, reindustrialise Britain, and build more public housing, promising a more detailed 10-year national plan later this year. He has urged his cabinet to explore all possible ways to alleviate cost-of-living pressures for families.