John Healey named chancellor as Burnham picks cabinet
John Healey has been appointed chancellor of the Exchequer by new UK Prime Minister Andy Burnham, replacing Rachel Reeves in a move that puts fiscal policy under a former defence secretary who quit over military spending. Ed Miliband becomes foreign secretary as Burnham names his top team.
The appointment is Burnham's first major cabinet pick after taking office, and it immediately reshapes Britain's economic leadership at a moment when cost-of-living measures and a longer-term growth plan are due to take centre stage. Markets and finance watchers tracking UK fiscal policy will find the latest developments in our Fintech & Crypto Alerts coverage.
Key Takeaways
- John Healey replaces Rachel Reeves as chancellor in Andy Burnham's new government.
- Ed Miliband moves from energy secretary to foreign secretary, succeeding Yvette Cooper.
- Shabana Mahmood stays as home secretary; Louise Haigh becomes first secretary of state and chancellor of the Duchy of Lancaster.
- Healey resigned as defence secretary in June after a clash with the Treasury over military funding and a push toward 3% of GDP defence spending by 2030.
- Burnham has framed his arrival as a "circuit breaker," with cost-of-living plans due from Tuesday and a 10-year programme later this year.
Who is John Healey and why does his appointment matter?
Healey, MP for Rawmarsh and Conisbrough, served as defence secretary from July 2024 until he resigned on 11 June following a row over defence spending. He accused the Treasury of being unwilling to fund his Defence Investment Plan and sought a clearer path to raise UK defence spending to 3% of GDP by 2030.
As chancellor, he now controls the budget he once criticised. According to BBC News, he previously worked in Gordon Brown's Treasury and built international economic links across Europe, the Middle East and the United States.
In his first statement after the appointment, Healey called the role the "greatest privilege," saying: "Together, we will build a new economy, build new hope and advance the working people of this country."
What other cabinet roles did Andy Burnham fill?
Ed Miliband, Labour's former leader and most recently energy secretary under Keir Starmer, takes over as foreign secretary. Speaking after leaving No 10, he told the BBC the post is the "honour of my life," citing his parents' arrival in Britain as Jewish refugees fleeing the Nazis.
Shabana Mahmood has been reappointed home secretary. Louise Haigh, a key Burnham ally and former transport secretary, returns as first secretary of state, chancellor of the Duchy of Lancaster and Cabinet Office minister, replacing Starmer ally Darren Jones.
Several Starmer-era figures are out, including Reeves at the Treasury, along with David Lammy, Liz Kendall, Peter Kyle, Hilary Benn, Jo Stevens, Darren Jones and Steve Reed among those reported departing government.
How could Healey's brief affect UK fiscal and defence policy?
Burnham's team wants an experienced figure to pair fiscal responsibility with re-industrialisation, devolution, cost-of-living relief and growth, The Guardian reported. Healey will also face the practical test of funding higher defence outlays he championed from the Ministry of Defence.
In his first speech as prime minister, Burnham called the moment a "circuit breaker for Britain," promising early cost-of-living measures and a 10-year plan later in the year. For investors and households alike, the Healey appointment signals who will write the next chapter of UK fiscal policy.