Just hours into his tenure, Prime Minister Andy Burnham has found himself under fire for his ambitious plan to slash VAT on household electricity bills, sparking a sharp rebuke from a key figure in the previous government. Darren Jones, Chief Secretary to the Prime Minister under Sir Keir Starmer, took to X (formerly Twitter) to raise questions over how the new policy will be funded, casting a shadow of doubt over Burnham's leadership and challenging his administration's financial prudence.
Jones acknowledged the potential benefits of the VAT cut for families and its role in managing inflation. However, he swiftly turned the focus on the funding mechanism, stating, "But the DigitalID program was unfunded. The government will have to set out how it will pay for its new policies at the budget." This pointed remark highlights a striking parallel between Burnham's latest policy announcement and the previous government's Digital ID programme, which was highlighted by the Office for Budget Responsibility (OBR) as lacking specific funding in its November Economic and Fiscal Outlook.
The OBR report noted that "the cost of digital ID cards, for which no specific funding has been identified," and referred to "the risks around the implementation of digital ID cards for which no explicit provision has been made for its £0.6bn annual cost." Jones's critique not only targets Burnham's new government but also subtly reflects on the fiscal challenges faced by the previous administration, in which he held a senior position.
This early public challenge comes as Prime Minister Burnham prepares to hold his first cabinet meeting, amidst a backdrop of significant internal party tensions. The recent cabinet reshuffle saw several ministers closely associated with Sir Keir Starmer removed from their posts, including Darren Jones. The swiftness of Jones's intervention underscores the potential for ongoing internal party divisions, despite Prime Minister Burnham's emphasis on ending "factionalism" within the Labour Party following his ascension to leadership.
As Prime Minister Burnham navigates the complex web of government finances, the immediate scrutiny over the funding of his flagship policy serves as a stark reminder of the fiscal challenges facing the new administration. The coming weeks and months will reveal whether this early public disagreement is an isolated incident or the beginning of a more sustained public discourse from former Starmer loyalists on the direction and financial prudence of the new government.