Burnham Sacks Reeves as Chancellor in First Cabinet Reshuffle

New Prime Minister Andy Burnham has removed Rachel Reeves from her role as Chancellor of the Exchequer, in one of the first major decisions of his premiership as he begins assembling his Cabinet.

The move comes weeks after Ms Reeves faced sharp criticism from the hospitality sector, when a leading pub industry figure accused her of overseeing what he described as a “punishing” tax regime blamed for accelerating pub closures across Britain.

Simon Emeny, executive chairman of Fuller, Smith and Turner, had said the trade had endured “unprecedented interference” over the past decade, warning that a succession of tax increases and regulatory changes were pushing operators to breaking point.

His comments reflected growing frustration across the sector over the cost of doing business, with thousands of pubs having closed in recent years and operators reporting that margins remain under sustained pressure. Mr Emeny pointed specifically to rises in business rates, national insurance contributions and alcohol duty as measures that were fundamentally altering the economics of running a pub.

Confirming her departure in a statement posted on X, Ms Reeves, who made history as the UK’s first female Chancellor, said: “It has been the privilege of my life to serve as the Chancellor of the Exchequer. The economy today is stronger, fairer and more resilient because of the choices we have taken as a Labour Government over the past two years.

“Stability restored, investment delivered and reform to our economy under way. I said when I was appointed Chancellor that I would judge my time in office on whether the lives of ordinary working-class people had been improved. I’m proud to say that they have.

“And to every young woman and girl, let my time in office show there should be no ceilings on your ambitions, your hopes or your dreams.”

She added that she wished her successor “the very best of luck,” pledging her continued support to the Government.

Reacting to Mr Burnham’s appointment as Prime Minister, Allen Simpson, Chief Executive of UKHospitality, offered a cautious welcome, while urging the new administration to prioritise support for the sector.

“We congratulate Andy Burnham on becoming Prime Minister today and welcome his commitment to building the economy, supporting young people into work and creating growth that reaches every part of the country,” Mr Simpson said.

“Hospitality is uniquely placed to deliver these ambitions. As one of the UK’s most socially productive sectors, we provide millions of jobs, offer first career opportunities for young people, help people back into work and support communities across the country.”

Mr Simpson called for decisive action on tax, arguing that the sector’s growth potential was being held back by its current burden.

“Our sector is an economic powerhouse with huge opportunity, but that potential is being constrained by a significant tax burden. A permanent reduction in hospitality VAT to 10% would not only unlock investment and job creation, but also help make hospitality more affordable for consumers. Alongside lower business rates and reduced employment taxes, it would help deliver the growth the Prime Minister wants to see.”

He added: “We stand ready to work with the new Government to ensure hospitality is recognised, not simply as a contributor to the economy, but as a vital partner in unlocking growth, creating opportunity and supporting every community across the UK.”