Image source, EPA

The decision to cut VAT on household electricity bills is a "step in the right direction", according to the chief executive of energy company Octopus.

Asked about the autumn rise in energy bills as a result of the ongoing war in Iran, Greg Jackson tells BBC Radio 4's World at One programme that without Burnham's policy, the increase would feel worse.

Coupled with the Starmer government's measures to curb price rises, "bills are now going to be about £180 lower than they would have been," Jackson says as he calls for "fundamental reform".

Pressed on how he'd go about doing this, the Octopus boss says electricity bills have "much higher social and environmental levies than gas".

The government started to bring those levies down, Jackson says, but had they "finished the job" then that could potentially take a further £70 or £80 off bills.

Another area that could lead to lower bills, he adds, would be to combat "wasteful" measures in the electricity system, such as "paying wind farms to turn off on windy days, rather than giving electricity away for lower prices".

Promising to tackle the cost of living is one thing, delivering it is harderpublished at 14:13 BST

14:13 BST

Kevin Peachey
Cost of living correspondent

Image source, Daily Telegraph/PA

In January, the PM said every minute not talking about the cost of living is "a wasted minute". The chancellor said it was the government’s "number one focus".

Seven months on, the PM told ministers that they need to be a "cost of living government" and give people a sense “that help is coming”.

The only change is that’s it’s a different PM and a different chancellor.

To state the blooming obvious, the evidence of this year is that saying it is easy, delivering it is harder – not least when some of the biggest factors, like a global oil price, are largely beyond their control.

The cost-of-living in-tray is bulging: help with essential bills, both to come and those still unpaid; a lack of improvement in living standards; limited job prospects and security for those leaving education.

A Burnham-led government has signalled with today’s VAT cut that it is willing to intervene, but – to ease market jitters – only when that’s offset with less spending elsewhere.

Continuing that trend will inevitably create winners and losers, as well as tensions within and outside the government. Successfully navigating the course may well define whether Burnham and his team are winners or losers at the next general election.

Judith Moritz and Daniel Wittenberg
Special correspondent and senior producer

Image source, PA

Civil servants working for government departments based in London have been offered relocation packages to encourage them to move to the North of England, the BBC understands.

It comes as the first details are emerging about the new No 10 North which has already started work, according to sources close to new Prime Minister Andy Burnham.

The BBC has been told that the Northern branch of Downing Street will be overseen by cabinet minister and ally of Burnham, Louise Haigh.

Haigh, who is the first secretary of state, is thought to have been asked to lead a new Office for the Prime Minister, which will give her control of key decision-making bodies across government.

It is understood that the initial location of No 10 Northwill be Heron House in central Manchester, in the same building which houses offices for the intelligence service GCHQ.

It is likely that the longer term base for it will be at a new government "Digital Campus" which is under construction in the Ancoats area of Manchester. It is not due for completion until 2032.

You can read more on the plans for No 10 North in this news story.

Glenn Campbell
BBC Scotland political editor

Image source, Getty Images

Andy Burnham has spoken with Scotland’s first minister John Swinney for the first time since taking office in No 10.

The prime minister appears to have rejected Scottish government calls for another independence referendum.

A Downing Street spokesperson says Andy Burnham was “focused on practical measures, not constitutional changes like further referendums”.

Burnham’s team say he made clear in the conversation that they would need to “agree to disagree” on the issue.

That is not disputed by the Scottish government with a source close to Swinney saying they set out their “respective positions”.

More generally, both sides have described the call as “constructive”.

Burnham and Swinney are expected to work together on issues like tackling the cost of living.

The prime minister has also spoken with the leaders of the other devolved administrations and is likely to make early visits to Scotland, Wales and Northern Ireland.

What other options are there to help with electricity bills?published at 13:38 BST

13:38 BST

By Tom Edgington

The decision to cut VAT on electricity bills will apply to every family from October regardless of how rich or poor they are.

The move is expected to save a typical household £45 a year on average - which is £3.75 a month.

However, it’s worth remembering that the Starmer government has already extended a £150 discount on energy bills for eligible low-income households.

Could Burnham have provided targeted help rather than a universal cut in VAT?

“Doing something like that is a lot more complicated, so it would take a long time” says Jonny Marshall from the Resolution Foundation think tank.

He told BBC Verify the government could have targeted those in receipt of welfare benefits - but this would have excluded a lot of people “given how many are struggling with their energy bills”.

Another option would be to peg energy bill support to income so that if you earn below a certain amount you’d be eligible.

“But to do that would take a lot of setting up” in time for this winter, added Marshall.

We can bring you more now from this afternoon's cabinet meeting, where Andy Burnham has pledged to always “show how we’re going to pay” for policies.

In comments to his ministers at the top of the meeting, he promised to set out more plans "over the coming days".

“But always we will show how we are going to pay for it, what we are reprioritising. That will be a theme that we will always come back to,” he says.

Image source, Getty Images

As we've been reporting, Andy Burnham is conducting his first cabinet meeting since becoming PM yesterday.

Some familiar faces can been seen around the table, including former Health Secretary Wes Streeting - now defence secretary - and Labour Party deputy leader and new Education Secretary Lucy Powell.

Image source, Getty Images

Image source, Getty Images

We can bring you some more now from Andy Burnham's first cabinet meeting as PM.

He began the meeting by congratulating and thanking both new and reappointed ministers for being in his cabinet.

He told ministers that they need to be a "cost of living government” and give people a sense “that help is coming”.

Image source, Getty Images

Away from events in Westminster, Reform UK leader Nigel Farage has called on Prime Minister Andy Burnham to hold a general election.

Speaking from a rally in Norfolk, Farage says Burnham became the leader of the Labour Party "unopposed" and "has no mandate whatsoever" to push through the changes he is proposing.

"You cannot make the biggest change in British politics in 40 years without a mandate from the British people.

"It would be only decent, right and proper to call a general election on that issue and to do it now."

As a reminder, Farage triggered a by-election in Clacton after resigning as the constituency's MP on 7 July, following increased scrutiny over his finances and a parliamentary investigation.

However, he is standing again. Farage is the only candidate from a Westminster party after Labour, the Conservatives, the Liberal Democrats and the Green Party all declined to take part in the contest for the Essex seat.

A total of 34 candidates have been confirmed for the by-election, you can find the full list here.

Charlotte Hadfield
Live reporter

Image source, Downing Street

Andy Burnham appointed his final cabinet ministers shortly before the clock struck midnight on Monday.

As he prepares to hold his first cabinet meeting as PM, there's lots to unpack - here's the latest from our correspondents:

Economy

Burnham has promised to cut VAT from household electricity bills from 1 October. But already – within hours - he is taking flak from a man who just yesterday was in a senior job in Downing Street working alongside Keir Starmer, writes political editor Chris Mason. Here our cost of living correspondent looks at what the VAT cut really means.

Foreign policy

One of the first issues Ed Miliband will likely need to look at as foreign secretary is the US war with Iran, which is escalating again. Miliband is seen by diplomats I've spoken to as very competent, but he doesn't have much experience in the world of international affairs, says our international editor Jeremy Bowen.

Health

As Burnham pledges to reform social care, our health editor Hugh Pym says: "Yvette Cooper will in some ways be running one of the most significant areas of policy in England for the Labour government. Progress or not, social care and improving NHS performance are likely to be key areas on which voters assess Labour at the time of the next election."

Defence

John Healey’s appointment as chancellor has buoyed some of Britain’s biggest defence companies, writes our senior business reporter. Healey, who quit as defence secretary over the Treasury's “unwillingness” to fund a military spending plan, now overseas the public purse. Investors are hoping the UK will commit to increasing defence spending to 3% of GDP by 2030.

Home Secretary Shabana Mahmood has now arrived at Downing Street as more ministers assemble for Andy Burnham's first cabinet meeting.

New Foreign Secretary Ed Miliband is there too.

Pat McFadden has also arrived - he is staying on in his position as work and pensions secretary.

We've also seen the new Health Secretary Yvette Cooper, Leader of the Commons Alan Campbell and Chief Secretary to the Treasury Emma Reynolds arrive.

Image source, Getty Images

Image source, Getty Images

Image source, Getty Images

Image source, Reuters

Image source, PA Media

We've seen the new Chancellor John Healey also arrive for the first cabinet meeting.

He was formerly defence secretary under Keir Starmer before resigning over a defence spending row.

Bridget Phillipson, the ex-education secretary who attends cabinet as equalities minister, and Environment Secretary Angela Eagle have also been pictured walking into No 10.

Image source, Reuters

More ministers are arriving at Downing Street for the new prime minister's first cabinet meeting.

Defence Secretary Wes Streeting and Secretary of State for Northern Ireland Chris Bryant have arrived, and Angela Rayner, who has been reappointed Housing Secretary, has also been seen walking up to the famous front door.

Image source, Getty Images

Image source, PA Media

We're seeing ministers arrive at Downing Street for Andy Burnham's first cabinet meeting.

His cabinet was announced on Monday evening, after several members of Keir Starmer's government were sacked.

Housing minister Matthew Pennycook who attends cabinet was seen walking down the road and into Number 10, followed by Lucy Powell, who is now the education secretary.

You can also watch live at the top of this page.

Image source, Getty Images

Image source, Getty Images

Kevin Peachey
Cost of living correspondent

Image source, EPA

The VAT cut on electricity bills is estimated to amount to £45 a year (or about £4 a month) for a household using a typical amount of energy.

For many that will be a welcome, but still relatively small, reduction to bills. Whether it proves to be a cut to the total bill depends on wholesale energy prices.

A typical bill rose by 13% - about £18 a month – in July, owing to the impact on those wholesale costs of conflict in the Middle East. It is currently expected to stay at roughly that level in October, but could go up.

Food prices are rising at 2.2% a year. In 2022, it cost £1 for the average box of six supermarket own brand free-range eggs. By May this year, the same box costs £1.80. Wages have risen too, but not as fast.

This will help, but not solve, cost-of-living pressures.

So, it is a signal to the public that the new government is willing to interject to reduce bills, but a signal to the markets that it would only do so if it can find the money from savings elsewhere.

Image source, PA Media

Long before Burnham's cabinet decisions were announced yesterday, movements on who he would have in, and who he would send home, had been the subject of debate.

It was widely anticipated that Rachel Reeves would not hold on to her post as chancellor, and yesterday she was indeed replaced by former Defence Secretary John Healey.

While she returns to the backbenches - her sister, Ellie Reeves, has been brought on to the front bench and appointed attorney general.

They are not the only sibling pairing to have made it to the top of politics.

New Foreign Secretary Ed Miliband has followed in the footsteps of his brother David Miliband who held the role himself between 2007 and 2010.

While Angela Eagle, who has just been appointed environment secretary, is twin sister to Maria Eagle who served as a minister of state at the Ministry of Defence from July 2024 - September 2025.

Madeleine Lake
Live reporter

Image source, Getty Images

For the first time in a UK cabinet, women outnumber men.

On Monday, Andy Burnham began to form his government and out of the 23 full members of the cabinet - including the PM - 12 are women and 11 are men.

Among the women appointed are Home Secretary Shabana Mahmood, Housing Secretary Angela Rayner, Louise Haigh as first secretary of state, and Lucy Powell as education secretary.

Image source, Getty Images

The previous record was set in Keir Starmer's first cabinet in 2024, with 11 women out of 22 full members.

Another milestone was reached that year with the appointment of Rachel Reeves as the country's first female chancellor. Former Defence Secretary John Healey has been appointed as the new chancellor in Burnham's government.

Image source, Getty Images

Image source, Jeff Overs/BBC

This lunchtime, Andy Burnham will gather his new cabinet for the first time.

Its appointment became something of a nocturnal affair, with a minibus full of ministerial wannabes still inside Downing Street at 22:00 BST on Monday, waiting for their new positions to be confirmed, writes the BBC's political editor Chris Mason.

Burnham has appointed John Healey as his new chancellor, Ed Miliband as foreign secretary and Wes Streeting as defence secretary - here we take a look at the latest cabinet appointments.

At 06:00, the newly formed government announced its first major policy aimed at cutting VAT from domestic electricity bills.

Stick with us for all the action and analysis throughout the day.

Chris Mason
Political editor

Image source, Reuters

Andy Burnham has started his first full day in the job with a promise to cut VAT from household electricity bills from 1 October.

But already – within hours - he is taking flak from a man who just yesterday was in a senior job in Downing Street working alongside Keir Starmer.

On Monday night, the former chief secretary to the prime minister, Darren Jones, posted a picture on X of him having a beer, captioned "thank you and good night. See you September."

If that was meant to suggest a vow of silence it only lasted a little over 12 hours, because at breakfast time this morning came another post, this one unaccompanied by any picture but loaded with political bite.

"Good news that VAT will be cut on electricity bills," wrote Jones.

"It's a simple way for families to save a few quid, and to mechanically help to keep inflation that little bit lower. But the DigitalID program was unfunded. The government will have to set out how it will pay for its new policies at the budget."

Ouch - that will sting in Downing Street.

Image source, PA Media

VAT cuts on household electricity bills are "a start" but more needs to be done, says Green Party leader Zack Polanski.

In a post on X, Polanski adds "it won't be nearly enough for the millions of families facing another tough winter".

He says that a "robust energy cap" is needed to protect people from the "fall out" from the war in Iran.