U.K. Prime Minister Andy Burnham’s announcements during his first 24 hours on the job underscore the political and financial challenges he faces as he tries to jump-start the country’s sluggish economy. Burnham, from Britain’s left-leaning Labour Party, faces restive voters seeking relief from the high cost of living.

Economic Challenges

At the same time, the investors who help finance the government by buying its bonds are demanding that he reduce public sector debt that has ballooned to levels last seen in the 1960s. In an effort to balance the competing demands, Burnham surprised pundits by naming former Defense Secretary John Healey as his Treasury chief.

Healey, who served in the Treasury under former Prime Minister Gordon Brown, is seen as someone who will make sure the government lives up to its pledge to reduce Britain’s debt pile. Then, first thing Tuesday morning, Burnham made a down payment on his commitment to ease the pressure on cash-strapped consumers. The government announced it would scrap the tax on home electricity use for at least six months beginning in October, saving the average household 45 pounds ($60) a year.

Financial Constraints

Importantly, the government said the move would be paid for by canceling plans to introduce digital ID, in an effort to reassure investors that Burnham isn’t about to go on an unfunded spending spree. Treasury chief has a big job ahead. “Healey has a daunting task on his hands,’’ said Victoria Scholar, the head of investment at interactive investor.

“The government has ambitious plans to tackle cost-of-living pressures … but he faces a very difficult set of public finances to carry these expensive plans through.” Now that he’s controlling the purse strings, Burnham faces the same issues that have bedeviled every prime minister since the financial crisis of 2008.

Original reporting: KTBS 3 (Shreveport) — read the source article.