Prime Minister Andy Burnham has prioritised addressing living costs during his first cabinet meeting, announcing a VAT cut on household energy bills from October.

The policy, aimed at saving typical households around £45 annually, faces funding challenges as it requires redirecting funds from Sir Keir Starmer's previously planned digital ID scheme.Downing Street claims the £850m cost can be covered by £1.8bn earmarked for the ID programme, but critics argue the plan lacks clarity.

Opposition parties have questioned the funding strategy, with Conservative shadow chancellor Sir Mel Stride criticising the government's fiscal approach.Burnham also announced additional funding for rough sleeping initiatives, sourced from uncommitted housing department spending.

The cabinet reshuffle saw key figures like Rachel Reeves and David Lammy removed, while new appointments include Ed Miliband as foreign secretary and John Healey as chancellor.Burnham emphasised the need for fiscal discipline and public investment, setting the stage for further measures ahead of his first Budget.

The government's plans to establish a new Downing Street unit in Manchester and streamline departmental priorities underscore its focus on economic growth and strategic governance.