New prime minister Andy Burnham names John Healey as chancellor as he picks his cabinet.
He has been chosen to replace Rachel Reeves as chancellor. Reeves’ tenure at No 11 Downing Street was marred by several controversial policy decisions – not least her now-infamous 2024 Budget, which saw her raise national insurance contributions, increase the minimum wage and fail to deliver meaningful business rates reform.
Healey was defence secretary under Keir Starmer’s government from July 2024 to June this year, when he resigned over a row with the then prime minister over military spending.
The current MP for Rawmarsh and Conisbrough, Healey was first elected to parliament in 1997 and served as a parliamentary private secretary to then chancellor Gordon Brown from 1999 to 2001.
Between 2001 and 2010 he also served as adult skills minister, treasury minister, local government minister, and housing minister.
In a statement, Reynolds said: “It is the greatest privilege to be appointed Chancellor of the Exchequer by the Prime Minister. Together, we will build a new economy, build new hope and advance the working people of this country. Time to get on with the job.”
Shabana Mahmood, who had earlier been tipped as a potential chancellor, has been reappointed home secretary, while former Labour Party leader Ed Miliband has been named foreign secretary.
Former business secretary Peter Kyle was earlier sacked by Burnham, with former parliamentary secretary to the Treasury Jonathan Reynolds being linked with the job.
Kyle departs along with former deputy prime minister David Lammy and former housing secretary Steve Reed.
The cabinet reshuffle comes hours after Burnham delivered his first official speech as prime minister, outside of No 10 Downing Street.
Burnham used his first speech as prime minister to promise those being affected by the cost-of-living crisis “breathing space” from his first full day in office.
He added that, as prime minister, he would take power out of Westminster and bring it to “every postcode in the land, so they can do more”.
He also pledged to build a new economy, saying he would put “life’s essentials back under public control” to make them affordable again and re-industrialise the UK to “back British industry”.
This was all part of what he said would be his new 10-year plan for Britain, which will take shape in the coming months.
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