Andy Burnham vows to ‘bring back hope’ as he unveils his cabinet | Andy Burnham

Andy Burnham said his rise to power would “bring hope back” to Britain as he began his term as prime minister with the surprise appointment of John Healey as chancellor and a promise to repair the damage done to communities under Thatcher.

Addressing the country after taking over from Keir Starmer at Downing Street, the UK’s new prime minister acknowledged people were “fed up” with politics and said the government must “do better” to deliver real change.

Speaking outside No 10, he said the government would announce “some breathing room” to people on the cost of living on Tuesday, with cuts to energy bills and bus fares expected as part of a fully-funded package.

Burnham later told reporters he would look at “any flexibility” in the government’s existing fiscal rules to help borrow billions more to invest in infrastructure but would take a “very cautious” approach to the economy.

Prices for Britain’s 10-year gilt fell following his comments, with markets already on edge due to high borrowing and rising debt risks. However, they were closed when Healey, who was seen as a safe hand, was announced.

The former defense secretary, whose resignation pushed Starmer to the brink, has emerged as a compromise candidate after Ed Miliband and Shabana Mahmood were approached for the role. Miliband takes over as foreign minister, while Mahmood remains at the Home Office.

In her first call to world leaders, Burnham spoke to Donald Trump, who had previously said he was just the mayor of “a town”, and invited him to Manchester for next year’s G20 summit. He also called Ukrainian Volodymyr Zelenskyy and European Union president Ursula von der Leyen.

Burnham’s arrival at Downing Street as the UK’s sixth prime minister in a decade, after Labor MPs’ brutal sacking of Starmer, gives her party the opportunity for a second hearing with the public, but could also lead to further instability.

Speaking without notes, and watched by his wife, Marie-France van Heel, he said: “I am acutely conscious that I am the sixth person in the last 10 years to walk up this street, the seventh prime minister since 2016, making this a moment for reflection and new resolution.

“My generation of politicians need to up our game and take on new challenges. Britain needs to show the world that we can regain our stability once again, and this is our challenge to make politics work, work better.”

“I know people at home are fed up with politics. I hear you and I want to be honest with you. We haven’t been good enough and we need to be better. We will be.”

He told the assembled crowd: “Let’s build a new sense of national unity, common purpose and positivity. Let’s do this in the moment when Britain begins to believe again, when we bring back hope.”

After sacking a group of Starmer loyalists, including chancellor Rachel Reeves and deputy prime minister David Lammy, who is understood to have turned down another job to return to the backbenchers, Burnham spent Monday evening making cabinet appointments.

In another senior appointment, Burnham’s right-hand woman, Louise Haigh, was appointed first secretary of state and chancellor of the Duchy of Lancaster, heading a strengthened Cabinet Office that would become the “political engine room” driving his agenda.

Yvette Cooper will move from the Foreign Office to the Department of Health, where she will oversee Burnham’s plans to transform the broken social care system, while Pat McFadden will remain at the Department for Work and Pensions.

Burnham, who took over the leadership of the Labor Party from Starmer on Friday, has put transforming Britain’s economic system at the center of his plans, despite limited room for maneuver before the next election due to his adherence to fiscal rules.

“We will create this moment For Britain, the circuit breaker highlights the biggest changes of the last 40 years. “A new political model and a new economic model,” he told the crowd gathered in the Downing Street sunshine.

“Britain went down some wrong paths in the 1980s: political power was centralised, economic power was privatised, large parts of the country were deindustrialised and have still not recovered.

“A lot of people still feel like they’re in decline and they don’t have the ability to turn things around. That’s why we’re going to change politics to be collaborative, problem-solving focused rather than point-scoring. And we’re going to take the power from here and move it to every zip code in the country so they can do more.”

By appointing Healey, a former Treasury secretary under Gordon Brown, Burnham has appointed someone with experience in delivering on his vision for the UK economy by combining fiscal responsibility with a focus on re-industrialisation, devolution, the cost of living and growth.

The new chancellor will now also be responsible for finding the money to increase military spending to 3% by 2030 and is expected to closely examine defense bonds, which he championed while at the Ministry of Defense but were rejected by the Treasury because they meant more borrowing.

After his speech, Burnham told reporters he planned to unveil a fully-funded cost of living support package this year, including support for energy bills and bus fares, and could include more radical plans such as freezing private sector rents.

“We just want to do some things that people will feel and feel pretty quickly. It’s not going to solve everything, it’s not going to take away all the pressure, but it just shows the direction of travel and shows that we’re serious about helping them,” he said.

He also made comments about further borrowing under fiscal rules, which he discussed during the Makerfield campaign but which still upset markets when made at No 10.

“I said we will stick to the fiscal rules, by which I mean the existing fiscal rules, and of course we will use any flexibility within them,” he said. “So none of this is about taking risks on the economy. I’ve never done that in any role I’ve held. I’ve always taken a very cautious approach.”

In his speech, Burnham announced that the first instruction he would give to the government after visiting homeless people in central London on Monday would be to end insomnia. He made a similar commitment when he became mayor of Greater Manchester but oversaw four years of rising street homelessness.

He also suggested he could cut income tax for low-income earners in a future budget and potentially increase the tax-free personal allowance, which has been frozen for the past five years. However, he also rejected the possibility of reintroducing the top tax rate to 50p.

Speaking before leaving No 10 for the final time, Starmer told the assembled crowd that he was “done” in giving up on Labor, but gave Burnham a final warning about foreign affairs. “We now face a world where our enemies will do anything to divide us,” he said.

The outgoing prime minister, who left handwritten notes to all Downing Street staff, added: “I go with a smile, I go with a smile and I’m proud of everything we’ve achieved.”