Andy Burnham who became Britain’s seventh Prime Minister in ten years on Monday, has made the key appointments to his Cabinet.
In a surprise move, former Defence Secretary John Healey has been appointed Chancellor, replacing Rachel Reeves.
Ed Miliband or Shabana Mahmood had been widely expected to be given the role. Instead Miliband, the former Energy Secretary, will replace Yvette Cooper as Foreign Secretary while Mahmood will remain as Home Secretary. Cooper becomes Health Secretary
Meanwhile, Louise Haigh, who resigned as Transport Secretary in 2024 after admitting a fraud conviction involving a mobile phone ten years earlier, has been promoted to Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office. She was a key advisor to Burnham during his Makerfield by-election campaign and Labour leadership bid.
Burnham officially became prime minister on Monday afternoon following a meeting with King Charles at Buckingham Palace, where he was instructed to form a government.
His reshuffle has seen the sacking of several major players from Sir Keir Starmer’s government, including former Chancellor Rachel Reeves, who reportedly turned down a “big job” from Burnham. Others who have lost their jobs include Steve Reed as Housing Secretary and David Lammy as Justice Secretary.
Chancellor: John Healey
Former defence secretary John Healey was the first to arrive at Downing Street (Photo: Alishia Abodunde/Getty Images)Caroline Wheeler, Political Editor
In the end, the smart money was wrong. Westminster had spent days reporting briefings that Shabana Mahmood would land the job of Chancellor amid claims Andy Burnham had cooled on appointing Ed Miliband. Instead, it is John Healey – who until last month was Defence Secretary, and for a few weeks a backbencher without a departmental brief – who has been handed the keys to No 11.
Few tipped him for the job, but the pairing makes more sense than the surprise suggests. Healey and Burnham are said to share the same instincts: maintaining economic stability and the current fiscal rules, reindustrialisation, devolution, tackling the cost-of-living crisis, and backing British jobs and industry to drive growth.
Healey is no stranger to the Treasury. He served as Economic Secretary and then Financial Secretary under Gordon Brown for five years in the 2000s, giving him a grounding in fiscal machinery that few of his new Cabinet colleagues can match. He’s also been Housing Minister and shadow housing secretary, and Burnham has made building more council homes a priority – an area where Healey has long-standing experience, including bringing forces housing back into public ownership as Defence Secretary. He is well regarded internationally too, with relationships across Europe, the Middle East and the US.
He is not a dynamic figure, nor one closely associated with the party’s progressive wing. That is arguably the point: a safe, trusted pair of hands who won’t spook the bond markets at a fragile moment for the public finances.
Expect defence spending to be an early test. Healey quit as Defence Secretary last month in a very public row over the underfunded Defence Investment Plan, warning it risked leaving the forces less ready and the country less safe. Chancellor Healey, colleagues believe, will now push to fund the settlement he couldn’t secure from outside.
Home Secretary: Shabana Mahmood
Shabana Mahmood had been widely tipped for Chancellor (Photo: Yui Mok/PA Wire)Arj Singh, Deputy Political Editor
Shabana Mahmood staying as Home Secretary is a strong signal that Burnham believes a tough approach is needed to immigration, with the new Prime Minister perhaps being convinced of the plan while fighting Reform UK to win the Makerfield by-election last month.
While the Prime Minister has suggested he is uncomfortable with aspects of Mahmood’s hardline immigration crackdown, particularly applying tougher settlement rules for legal immigrants retrospectively, the Home Secretary was already working on a compromise in this area in the face of a Labour revolt.
Mahmood, who wanted to stay at the Home Office, has also possibly been rewarded for moving against Sir Keir Starmer while in Cabinet, helping to pave the way for Burnham.
Foreign Secretary: Ed Miliband
Ed Miliband and Shabana Mahmood arrived at Downing Street together (Photo: Reuters/Temilade Adelaja)Caroline Wheeler, Political Editor
Ed Miliband’s allies made little secret of his ambition to become Chancellor. For several weeks, sources close to him say he believed the job was effectively his. His aides were less certain, however, amid growing signs that Andy Burnham had cooled on the idea.
As markets became increasingly nervous about the prospect of a Chancellor from Labour’s left, momentum shifted decisively towards Shabana Mahmood. One source predicted Miliband would “go nuts” if he was denied the role after being led to believe it was his.
Missing out on the keys to No 11 is an undeniable setback. Yet Miliband has instead secured one of the other great offices of state: Foreign Secretary. As one of the Cabinet’s most experienced figures, he brings considerable international credibility to the role. During two years as Energy Secretary, he built relationships with counterparts around the world and developed the kind of diplomatic profile that translates naturally to the Foreign Office.
Whether the appointment proves a soft landing or a consolation prize, Miliband will now have to make his mark on the world stage rather than through the Treasury’s balance sheet. His ambitions to become Chancellor are, for now, on hold. In the process, he has also thwarted the hopes of his elder brother David, who was understood to have been eyeing the role himself.
Cabinet Office and Chancellor of the Duchy of Lancaster: Louise Haigh
Louise Haigh supported Andy Burnham throughout his by-election campaign (Photo: Ryan Jenkinson/Getty Images)Caroline Wheeler, Political Editor
Louise Haigh’s promotion to First Secretary of State and Chancellor of the Duchy of Lancaster will have surprised almost no one in Westminster. She has been Andy Burnham’s closest lieutenant for months, and now she has the job title, and the office, to match.
It’s a striking turnaround. Haigh resigned from Starmer’s cabinet as Transport Secretary in November 2024, within months of entering it, after details emerged of a past conviction over misreporting a lost phone – an episode allies say she felt she was treated harshly for, having already disclosed it before her appointment. Rather than ending her career, the episode pushed her towards Burnham’s camp. She became a central figure in his campaign for the Makerfield by-election and in the transition operation that has now delivered him Downing Street. As one MP put it simply: “If you want to talk about policies in Andy’s government you need to talk to Lou Haigh.”
That closeness explains the shape of her new brief. As CDL and First Secretary of State – a title previously held by big beasts like George Osborne and John Prescott – she’ll run the Cabinet Office and effectively serve as Burnham’s deputy, driving his priorities across Whitehall: more public control of services, tackling the cost-of-living crisis, and applying his “Makerfield test” to government policy, judging every decision on whether it works for towns like the one that returned him to Parliament.
Running “No10 North” and working alongside the housing and communities department, she’s also expected to lead on what Burnham has billed as the biggest rebalancing of power in a generation, pushing English devolution further and faster.
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