UK Chancellor Healey challenges Cabinet to find budget cuts under PM Burnham

Chancellor John Healey has challenged Cabinet ministers to identify savings in their budgets, hours after Andy Burnham faced criticism over an "unfunded" tax cut.

In the first Cabinet meeting under Prime Minister Burnham's government, Healey urged ministers to "look harder" at spending priorities across departments.

Burnham also called on ministers to consider "how we are going to pay" for policies, insisting he would lead a "cost of living government."

Healey's Remarks

Healey stated: "It's going to be a task for all of us to recognise that we need to look harder at our own budgets and that reprioritisation does allow us to do more to relieve the cost of making life a little more affordable for people in the future, and to maintain the fiscal discipline."

He described his top duty as maintaining "fiscal control," while adding that there would be a "reprioritisation" in government efforts to tackle price rises and stagnant household incomes.

Healey also praised a VAT cut on energy bills as evidence that Burnham was "offering a bit of help."

Criticism Over Unfunded Tax Cut

The Cabinet comments came hours after former chief secretary to the prime minister Darren Jones publicly criticised the government for making an "unfunded" tax cut. Jones noted that the digital ID policy—now scrapped by Burnham—had not been costed.

Call for Teamwork

Burnham insisted that ministers must work as a "team" and that, alongside Cabinet Secretary Antonia Romeo, he would "set the tone at the top in relation to our relationship with our colleagues in the civil service." The remarks represented a plea to end briefing wars that had damaged relationships under Sir Keir Starmer's government.

Budget and Spending Review

The Prime Minister and Chancellor's focus on the cost of living and internal decisions adds to anticipation around the Budget later this year, which will set financial limits ahead of a Spending Review in mid-2027.

Burnham is expected to announce several fiscal policies following the VAT cut on his first full day as Prime Minister, with business rates relief for pubs anticipated as one of the announcements.

A series of policies were floated by Burnham and his advisers during electoral campaigns in Makerfield, although it remains unclear which will be adopted. Healey, who resigned as defence secretary under Keir Starmer amid a dispute over investment in the sector, is expected to make defence funding a key pillar of his agenda.