Can new Chancellor John Healey “Build Hope for Britain”

We officially have a new Prime Minister, Andy Burnham, and we recently covered what a Burnham Premiership might mean for your finances, our country and our chances of making the super-rich pay their fair share. But how does his surprise pick for Chancellor, John Healey change the picture.

What we know about Healey

John Healey has been MP for Rawmarsh and Conisbrough in Yorkshire (previously Wentworth and Deane) for nearly 30 years. He was made Secretary of State for Defence after Labour’s election win in 2024, until he resigned noisily earlier this year— potentially signalling to Burnham that he was ‘his guy’. Before that Healey held a wide range of Junior Ministerial and Shadow Ministerial positions, from an Economic Secretary under Blair to Minister for Local Government under Brown, and Shadow Housing Minister under Corbyn.

Healey’s resignation from his position at the Head of the Defence department came after the Treasury refused to fund his plan for defence spending, to reach 3% of GDP this parliament— which would have required an estimated £17.3billion a year. No wonder then that shares in arms manufacturers soared after news of Healey’s appointment. We know then he believes in spending to bring about change. But beyond that, and despite his relatively frontline political career, we’re still learning about Healey’s economic views.

His most defining political characteristic has been unwavering loyalty to the party line. In 30 years in Parliament, across nearly 5,500 votes, and through a wide variety of Labour iterations, he’s voted against the Labour whip just 20 times (none of them in the last decade). And we could only find five instances that he has ever spoken about “tax” in parliament, none of which were particularly illuminating. This may be precisely why Burnham chose him— a capable, steady operator, respected by many across the Labour PLP who, perhaps most importantly for the new PM, is unlikely to clash with Burnham’s own strong economic opinions, especially his commitment to devolving power.

Healey did spend five years at Brown’s Treasury where he oversaw attempts to regenerate and devolve power. These programmes were later scrapped after the change of government, but chime well with Burnham’s own ideology of so-called Manchesterism. He has previously championed tax transparency and anti-corruption measures, and used his platform to rail against Britain becoming “the destination for the dirty money that keeps Putin in power.” Although his focus has often been on Russia (perhaps simply due to his position as Defence Minister) he has been less vocal on the harder conversations about the UK’s own outsized role in fuelling global dirty money. With a major summit on Dirty Money just months away, we’ll know soon enough whether Healey will be the person to finally tackle this big problem. Ed Miliband’s appointment as Foreign Secretary, and his previous strong record and commitment to tackling international tax dodging and illicit finance, also gives us hope.

Other than that, in the 2010s Healey was vocal in his opposition to the bedroom tax— a very badly designed policy that squeezed some of the poorest for cash in a cruel and performative way. At the time he said, “The next Labour government will need to make tough choices on spending and we won’t borrow more to pay for social security. But we can and will do things differently.” This could be seen as talking up tight fisted fiscal responsibility, or simply a preference for a tax and spend approach over borrowing. It’s encouraging that at the time he wanted to pay for the bedroom tax repeal by “reversing a tax cut for hedge funds, scrapping the government’s shares for rights scheme and tackling disguised employment in the construction industry”.

New PM, new policies

In first positive signs, Burnham has used his early days to speak repeatedly about the cost of living— which remains top of the list of public concerns. We know that there are millions of people struggling and the government has to start tackling the issue so that people feel their lives are improving. But better than just talking about it, Burnham has already announced two very modest, but material, interventions.

From October, VAT will be scrapped on your home electricity bills, saving the average household £45 a year. It will add complexities into the system, and it’s not perfectly targeted, as it means those with the biggest bills (usually those with the biggest houses) will save the most. But for those really struggling it could mean another week with food on the table. We also like this mechanism which guarantees savings for consumers, unlike many tax cuts on energy which have a tendency to be swallowed up by mega-rich fossil fuel giants. Most importantly, it signals intent: a willingness to move fast, even with imperfect tools, to ease pressure on ordinary people.

Second, a nationwide £2 bus fare cap will cut the maximum price of a journey by £1. Although it disappointingly will not come in until January 2027, we like this policy too. It is not only better targeted— helping those on the lowest incomes who are more dependent on bus travel— but it has multiplying effects. Cheaper transport means more money circulating in local economies. It helps people reach jobs, healthcare, education, and care responsibilities. £2 saved on a return bus ticket is more money in your pocket at the end of the week. It can become an extra coffee on the high street, a training opportunity that suddenly becomes accessible and puts someone on a path to employment, or a trip to the doctor’s that stops an illness getting worse.

There are already questions about how these policies are funded. Burnham initially said the money would come from scrapping the controversial £1.5 billion Digital ID card scheme, but it turns out the scheme wasn’t fully budgeted. And the bus cap is currently financed by restructuring and weakening international climate funding— a short‑term “fix” that shifts the costs onto some of the poorest people in the world at the sharpest end of the climate crisis. The bus cap should stay, but there’s much better ways to pay for it. Because where money comes from matters just as much as where it goes.

Moving money, multiplying money

This is the heart of the issue. Not all public spending is equal. Our media has an unhealthy tendency to equate the government’s finances to household budgeting. This isn’t only unhelpful, it is also completely inaccurate. In fact, it’s much more useful to think of a country like a business. When you invest smartly you make more money.

Some interventions cost money, but generate far more economic activity than they consume. In fact, new research shows that investing £11billion in social housing today, wouldn’t just provide homes for 90,000 families, but add over £50billion to the UK economy over 30 years. And when you factor in savings to the social security budget, the impact on employability, the boon to the construction industry and associated tax receipts, it would be a net benefit to government coffers of nearly £12 billion. Other targeted spending on childcare, health and education are known to have similar “multiplier” effects where each pound invested generates even greater returns for the state and the national economy.

It’s obvious really, when you put money into the pockets of ordinary people, they spend it locally, boosting growth. When you invest in keeping people healthy and happy, they’re far more productive. When you upgrade national infrastructure, you strengthen the foundations of the economy itself. And when you take money from unproductive wealth— the hoarded fortunes of the ultra‑rich, the profit margins of tax‑dodging multinationals siphoned off to shareholders, the offshore accounts of the corrupt— and redirect it into households, public services, and local businesses, the return is greater still. That is how you rewire an economy.

These early policies like the bus cap and VAT reduction are welcome, but they are low‑hanging fruit which do nothing to change the design of our broken economy. To truly put an end to the cost of living crisis, and breathe life into communities hollowed out by years of underinvestment, the government will need to go much further: investing in all regions of the UK to share prosperity and create jobs, restoring the NHS, expanding free childcare, improving public transport, building affordable council housing, and bringing down energy bills. We’ve shown how the UK could raise £50 billion through fair taxes that deliver for ordinary people rather than holding them back — a blueprint for a fairer, more dynamic economy. The question now is whether Healey is likely to follow it?

We just don’t know. And we aren’t able to judge Burnham and Healey’s approach just yet. Time will tell. But importantly they are not operating in a vacuum. Remember, it’s also up to us to shape what sort of Prime Minister and Chancellor they’ll be. Thank you for being part of the People’s Lobby, and helping us wield our collective power to hold the new government accountable. We already know that one of Burnham’s biggest influences and closest allies is pulling for a Wealth Tax, and Burnham has repeatedly refused to rule it out. So now is the time to lift our voices and increase the pressure on Burnham to make the changes we need.