All change in Whitehall?

Simon Goldie, Director of Advocacy

One of the prerogatives of a Prime Minister is to reshuffle the Cabinet. Some occupants of No. 10 like to do this fairly often, while others try and avoid Whitehall disruption. On this occasion, Whitehall has certainly had a shake-up, as Rishi Sunak shuffled government departments as well as ministerial jobs. The changes send a signal about intent as well as setting a direction of travel for policymaking.

Here is a quick overview of what has happened:

• The Department for Business, Energy & Industrial Strategy has become the Department for Business and Trade
• The Department for Culture, Media and Sport has lost its digital arm
• Two new departments have been established: Science, Innovation &Technology and Energy Security & Net Zero

Keen Whitehall watchers will know that the business department emerged from the Department of Trade and Industry, which was originally the Board of Trade. It makes sense to combine business and trade. The change also sees the end of using industrial strategy in the title. This was an innovation under the Theresa May administration and never sat well with Boris Johnson or Liz Truss. Sunak has made it clear that a government he leads will not give this area the priority May did. That doesn’t mean we won’t see policies that might sit comfortably within an industrial strategy. Policies around skills and investment will continue. The difference is focus. Materially, this shouldn’t mean any change to the British Business Bank, which will sit under the business department. However, we may see a greater emphasis on supporting SMEs who export.

Culture, Media and Sport is back to where it was. By setting up two new departments with briefs to look at innovation, energy security and net zero respectively, Sunak is diverting resource into these areas. However, for the next few months effort will go into the structural changes and not the policymaking.

Only time will tell how well this works. Energy security has shot up the policy agenda in the last year, so one can see the logic of having a new department look at that along with net zero. Innovation and technology help drive an economy and increase productivity. The question is what policies will these departments develop, not whether these are important areas, which they clearly are.

In all the changes it is worth remembering that HM Treasury, Sunak’s old stomping ground, holds the purse strings. In the same week that these changes have taken place, the FT is reporting that Treasury have banned any capital spending by Michael Gove’s Levelling-up ministry.

That’s why as well as maintaining strong relationships with officials and ministers across Whitehall, we stay very close to HMT at all times.

Published 10 Feb 2023