John Healey has been given the job of Chancellor of the Exchequer by the new Prime Minister, Andy Burnham. The Chancellor is the government's top finance minister, in charge of how public money is raised and spent. Healey replaces Rachel Reeves in the role. The move comes days after Healey quit his previous job as Defence Secretary on a matter of principle.

Burnham, who became Prime Minister on 20 July 2026, brought Healey back into government right away. He called the Treasury "the most vital job of all in cabinet after the prime minister" BBC News.

When Healey resigned as Defence Secretary, he wrote in his letter that the Treasury had been "unwilling" to "commit the resources that the nation needs to defend the country at this time of rising threats". At the time, the Treasury was run by Reeves, the same person Healey is now replacing BBC News.

BBC sources said Burnham and Healey "have the same outlook" on rebuilding industry, the cost-of-living, and growing the economy across the country BBC News. Putting someone who already agrees with him in charge of the Treasury means the Prime Minister avoids a possible clash at the centre of government.

Healey's route to the Treasury is unusual. He served as Defence Secretary from 5 July 2024 until 11 June 2026 (Gov.uk; Gov.uk). He was still listed as a cabinet member in the April 2026 edition of the List of Ministers' Interests, published on 9 July 2026 (Gov.uk).

Reeves had been Chancellor since 5 July 2024, the same day the government was formed. She was elected as the MP — a local representative in Parliament — for Leeds West and Pudsey in July 2024 (Gov.uk). As of mid-July 2026, Ed Lawrence was listed as her Special Adviser, a politically appointed helper (Gov.uk).

Healey was elected as MP for Rawmarsh and Conisbrough in July 2024 (Gov.uk).

Two events happened close together. Healey quit as Defence Secretary, then Burnham won a by-election — a vote to fill an empty seat in Parliament — in Makerfield. The decision to bring Healey back into the cabinet, this time at the Treasury rather than Defence, followed within days BBC News.

Healey's argument with Reeves over defence spending, set out in his resignation letter, now has an extra layer to it. The man who said the Treasury was refusing to spend enough on defence will now run that same department. Whether that leads to changes in how money is allocated will become clear when the new Chancellor makes his first spending decisions.

The broader context here is a new Prime Minister putting his team in place. Burnham has acted quickly to install someone he trusts in the role that controls the public purse. He has chosen a person who, by his own account, left government because of the Treasury's spending choices. The result is a striking political circle: a Chancellor who resigned because spending was too tight now gets to set the spending plans himself.

For Reeves, the change brings a sudden end to a role she held from the government's first day. Her adviser, Lawrence, will leave with her. No replacement adviser has been announced for the new Chancellor.

For Healey, the appointment brings him back into government after just over a month away. His time at Defence, nearly two years, now gives way to a job covering all public spending — the very spending he said was too small.