Member Article

What does Theresa May’s cabinet reshuffle mean for businesses?

In a hectic day at Number 10 yesterday, new Prime Minister Theresa May shocked observers, both inside and outside the Conservative Party, as she unveiled wholesale changes to her cabinet.

Many had tipped May as the continuity candidate, the Tory to steer a smooth transition through the rocky waters of Brexit.

However, in a ruthless cull that included the sacking of some high-profile party figures, Michael Gove chief amongst them, and the rapid promotion of others, namely Boris Johnson; May has set her stall out early to mark distinguish herself immediately from the Cameron-Osborne era.

May’s biggest move has been to completely do away with the Department for Business, Innovation and Skills, set up by Gordon Brown in 2009, and replace it with the newly formed Department for Business, Energy and Industrial Strategy.

Greg Clark

The new department is headed up by former communities secretary and Middlesbrough-born Greg Clark, replacing former business secretary Sajid Javid who now takes charge of communities and local government.

Javid came under intense criticism for his handling of the ongoing British Steel crisis earlier in the year which has likely played a part in the reshuffle as May places a greater emphasis on ‘industrial strategy to get the economy firing.’

Clark, who has previous experience as shadow secretary for energy and climate change, will be charged with plotting the UK’s industrial growth strategy whilst promoting green initiatives to keep emissions in check.

Commenting on his new role, Clark said: “I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government’s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.”

In further moves, Justine Greening has taken charge at the Department for Education, replacing the outgoing Nicky Morgan, with an expanded brief that now includes the higher and further education responsibilities that formerly resided with the now defunct BIS.

Reshuffle reaction

Yesterday’s major overhaul is a clear signal from May that industrial strategy is to be a significant focus of her premiership, as years of disappointing manufacturing and productivity figures have been complemented by the continuing crisis in the steel industry.

Gareth Stace, Director of UK Steel, has welcomed the appointment of Clark and associated reshuffle in the new ‘souped-up’ department and believes he has all the ’right ingredients for success.

He said: “The [Secretary of State] has already a vast range of experience in all three divisions of this souped-up department and today must now mark the start of ensuring that government finally provides the tools to the UK steel sector in the short-term, so it can invest, thrive and play a significant part in building a stronger UK economy.

“We look forward to working with the new department to push forward the urgent action needed to remove unilateral costs, including energy, business rates and increasing the proportion of British steel used in British construction projects.”