UK PM Starmer reshuffles cabinet, John Healey appointed Chancellor of the Exchequer

John Healey has been appointed Britain’s new Chancellor as Prime Minister Andy Burnham unveils a major shake-up of key Cabinet roles.

The Rawmarsh and Conisbrough MP, who previously served as defence secretary under Keir Starmer before resigning earlier this year amid a dispute over spending commitments, marks a surprise appointment for the top Treasury role. The decision defies Westminster expectations of a promotion for Shabana Mahmood.

Former Labour leader Ed Miliband had also been in contention for the role, alongside former health secretary Wes Streeting, who appeared to have curbed his own party leadership ambitions in exchange for a top Cabinet position.

Market Reaction

The fresh Treasury appointment may come as a relief for City bosses and bondholders, who have voiced concern over Labour’s commitment to fiscal responsibility. Those anxieties may have been exacerbated by remarks given by Burnham to journalists on Monday, in which he pledged to stick to Labour’s fiscal rules but “use obviously any flexibility within them.”

A Bloomberg poll conducted last week found:

• Ed Miliband was the least popular candidate for chancellor in the City, with only 5% support
• Shabana Mahmood was second last, with just over 10% support
• Wes Streeting enjoyed a clear lead at more than 30%
• John Healey came second with 19%

Reeves Ousted

Rachel Reeves had signalled her hope to cling on to her position as chancellor following the resignation of Keir Starmer, telling top City leaders last month she had “unfinished business in fiscal devolution” — a nod to Burnham’s plans to give greater powers to regional governments.

But those hopes were quickly dashed after it became clear Burnham was readying a huge Cabinet overhaul. Her right-hand man, chief secretary to the Treasury Darren Jones, was also removed from his post.

In a statement on X, Reeves said it had been the “privilege of my life” to serve as Chancellor, adding that Burnham had her “full support.”

“To every young woman and girl let my time in office show there should be no ceilings on your ambitions, your hopes or your dreams,” she said.

Burnham’s Fiscal Vision

Burnham, who previously served as chief secretary to the Treasury under Gordon Brown and authored the 2007 Spending Review, is expected to be heavily involved in fiscal policy.

Britain’s new prime minister has made devolution a key tenet of his administration’s mission, of which handing more tax and spend powers to regional governments is set to be a crucial part.

“We will take power out of here and carry it into every postcode in the land so that they can do more,” Burnham said in his inaugural speech outside Downing Street.