Play01:17Burnham must convince Britain that his government can deliverAndy Burnham appoints key cabinet positions in first hours in office Prime Minister Andy Burnham has sought to repair a hit to UK defence credibility with the appointment of John Healey Chancellor, weeks after he quit government over funding the military build up.As the first step of Mr Burnham's roll out of a new cabinet, the veteran party stalwart's emergence in the finance portfolio took Westminster watchers by surprise. Earlier Mr Burnham took office as Britain's fifth prime minister in the 2020s. In brief comments to the press before the cabinet announcement, Mr Burnham said he would “stick to the fiscal rules, and by that I mean the existing fiscal rules, and use obviously any flexibility within them."John Healey reacts as he arrives in Downing Street to meet Andy Burnham. Carl Court / Getty ImagesInfoPress reports say Mr Healey recently lobbied Mr Burnham on using "defence bonds" in a special issuance to fund what is officially known as the Defence Investment Plan. It had been expected that either Home Secretary Shabana Mahmood or left-wing champion Ed Miliband would be given the keys to the Treasury. Both appointments would have put a highly influential Labour figure – and a possible rival – at the heart of government. Instead, he has opted for Mr Healey with his experience in government stretching back to the Treasury posts of the last Labour government in the 2010s.Andy Burnham, UK prime minister, speaks outside 10 Downing Street. BloombergInfoHis key role will be to maintain stability and to control spending, with Mr Burnham potentially pushing for more money to invest in the country. The fiscal rules, which Mr Burnham has said he will stick to, mean he has to get debt falling with no borrowing for day-to-day running of government. But it is understood that he could remain within the fiscal rules and still borrow up to £16 billion to invest in infrastructure, including defence spending. Outgoing British Prime Minister Keir Starmer hugs former Chancellor Rachel Reeves after delivering a farewell speech outside 10 Downing Street. EPAInfoMs Mahmood’s appointment came after a raft of sackings and resignations of leading figures in Keir Starmer’s cabinet with Chancellor Rachael Reeves resigning along with the sacking of deputy prime minister and former foreign secretary David Lammy, Attorney General Richard Hermer alongside Steve Reed as housing secretary and Peter Kyle and business secretary. “Stability restored, investment delivered and reform to our economy under way,” Ms Reeves wrote on social media announcing her resignation. It is understood that she was offered a more junior role, possibly defence, but declined it. The appointments came hours after Keir Starmer went to Buckingham Palace to hand in his resignation to King Charles III with Mr Burnham appointed a short while later. King Charles III with Prime Minister Andy Burnham, during an audience at Buckingham Palace. AFPInfoHe won the Labour leadership contest unopposed on Friday after Keir Starmer resigned last month following more than a year of sinking popularity and falling support among the glut of MPs who entered parliament in the 2024 landslide election. Mr Burnham is expected to make a landmark announcement on the cost of living on Tuesday that could result in low earners paying less tax and the rapid introduction of rent controls. The remainder of Burnham's cabinet is expected to reflect a balance of experience and fresh talent, with appointments covering the foreign office, health, education, and the home office. Updated: July 20, 2026, 5:33 PM