Starmer has shuffled his chairs – but businesses are worried he will still push through damaging new changes
Business groups have warned that while Prime Minister Keir Starmer makes changes to his Cabinet, damaging new changes are still set to be pushed through.
On 5 September, Deputy Prime Minister and Secretary of State for Housing and Local Government Angela Rayner resigned, triggering a major Cabinet and junior ministerial reshuffle by Prime Minister Keir Starmer.
Following an earlier refresh of the Number 10 and Treasury teams, these changes have been described as a ‘reset’ or Phase Two of the Labour Government.
Alongside a range of other changes, Peter Kyle has been appointed Secretary of State for Business and Trade. He previously served as Secretary of State for Science, Innovation and Technology and, before entering Parliament, worked in community development, international aid, and leadership roles in the voluntary sector. Regarded as on the moderate wing of the party, he has long championed apprenticeships.
Kate Dearden MP becomes Employment Minister, replacing Justin Madders MP. Elected MP for Halifax in 2024, she has already served as an Assistant Whip. Before entering Parliament, she worked for the Community Trade Union, giving her a strong grounding in employment, workers’ rights, and workforce engagement.
Despite the personnel changes, there is no sign the government will move away from the Employment Rights Bill, which is set to become law in the autumn, says the Recruitment and Employment Confederation.
It noted that the ministers remain committed to its provisions, which could be incredibly damaging for the business sector.
“The government’s reset will only land with business if it extends to the Employment Rights Bill. What was sold as a mission to Make Work Pay is already cooling hiring before it becomes law. Employers want to grow, and our business sentiment data shows this clearly. But the Bill is acting as a wet blanket on recruitment, and dampening jobseeker confidence.
“With ministers and economic advisers who understand business, there is a real chance to turn the Bill into a package that works for both workers and employers through practical, targeted changes, such as exempting agency workers from complex zero-hours rules and retaining flexibility on guaranteed hours contracts. The government has reshuffled the people; now it needs to reshuffle the Bill.”
The REC said it looks forward to working with the new ministers and officials to support hiring, flexibility, and economic recovery.
“Phase two offers an opportunity for fresh approaches, but for recruitment, the focus must remain on practical solutions that unlock growth and confidence, rather than measures that unintentionally stifle the labour market.”
