John Healey, who resigned from the previous Keir Starmer cabinet in protest over defense investment plans, has been appointed chancellor of the exchequer — widely regarded as the No. 2 position in government — by new Prime Minister Andy Burnham. [EPA=Yonhap]
John Healey, who resigned from the previous Keir Starmer cabinet in protest over defense investment plans, has been appointed chancellor of the exchequer — widely regarded as the No. 2 position in government — by new Prime Minister Andy Burnham. [EPA=Yonhap]

New British Prime Minister Andy Burnham reshuffled his cabinet Monday, tapping former Defense Minister John Healey in a surprise move as chancellor of the exchequer — the de facto second-in-command in the British government. Burnham also appointed former Energy Security Minister Ed Miliband as foreign secretary. Later that day, Burnham spoke by phone with European Commission President Ursula von der Leyen and German Chancellor Friedrich Merz, confirming plans to strengthen cooperation.

Healey had resigned last month from the previous Keir Starmer cabinet after a clash over defense spending. He criticized the Starmer government as "incompetent" for pledging to raise defense spending to 3 percent of GDP by 2030 while drawing up plans that reached only 2.68 percent. The Treasury, led by then-Chancellor Rachel Reeves, had blocked the full increase on fiscal grounds — and Healey has now taken that very post in the reshuffle.

The chancellor of the exchequer is widely regarded as the real No. 2 in the British government. While a deputy prime minister exists, the role is generally seen as ceremonial. The Treasury's grip on the budget gives it outsized influence over policy across government, making it something of an adversary to other ministries.

Healey is a veteran Labour politician who has served as a member of Parliament since 1997 and commands broad respect within the party. He served as a Treasury minister from 2002 to 2007 under a Labour government, and later held shadow cabinet portfolios covering housing and health before becoming shadow defense secretary in 2020 — a role he held for the past six years.

New British Prime Minister Andy Burnham delivers his first remarks outside 10 Downing Street in London on Monday. [EPA]
New British Prime Minister Andy Burnham delivers his first remarks outside 10 Downing Street in London on Monday. [EPA]

Political observers in London had widely expected Burnham to appoint his close ally, Home Secretary Shabana Mahmood, as chancellor — the No. 2 post. Burnham upended those expectations, however, and Mahmood remained in her post. Ed Miliband, the former energy security minister, was named foreign secretary. Miliband previously beat Burnham in the 2010 Labour leadership primary to become party leader. Former Foreign Secretary Yvette Cooper moved to become health secretary, while Pat McFadden was retained as work and pensions secretary. Jonathan Reynolds was appointed business secretary.

Burnham launched the reshuffle by emphasizing his intention to use "flexibility" within existing fiscal rules. He told the Financial Times he would stick to the current fiscal rules "while of course using all the flexibility within them." Whether Burnham will reintroduce a 50 percent top income tax rate on the highest earners has also drawn attention. He said it was "too early to say — I've only just sat down," but the Financial Times interpreted his remarks as leaving the door open to doing so. Burnham also said he would consider raising the tax-free personal allowance above the current annual threshold of 12,570 pounds for the lowest earners.

Meanwhile, Burnham spoke by phone with European Commission President von der Leyen and German Chancellor Merz immediately after taking office. With von der Leyen, he agreed to hold a UK-EU summit later this year, with working-level officials from both sides continuing related discussions. With Merz, he agreed to cooperate in countering the threat posed by Russia.


kate01@heraldcorp.com