Peter Kyle has been sacked as business secretary on Andy Burnham’s first day in Downing Street, leaving the government’s flagship late payment crackdown without the minister who built it while the bill is still midway through parliament.
Kyle became the third cabinet minister dismissed on Monday afternoon as the new Prime Minister assembled his own top team, following housing secretary Steve Reed and deputy prime minister David Lammy out of the door. Rachel Reeves was also sacked as chancellor, as Burnham moved swiftly against ministers most closely associated with Sir Keir Starmer.
No successor has been confirmed. The Financial Times has reported that Jonathan Reynolds could return to the brief, the role he handed to Kyle only last September.
For business owners, though, the more pressing question is not who next sits behind the desk at the Department for Business and Trade, but what happens to the agenda Kyle leaves behind.
Chief among it is the Small Business Protections (Late Payments) Bill, laid before parliament in May. The legislation caps payment terms at 60 days for large firms paying smaller suppliers, imposes mandatory interest of 8 per cent above the Bank of England base rate on overdue invoices, and hands the Small Business Commissioner powers to investigate and fine serial offenders. Government figures suggest poor payment practices drain roughly £11 billion a year from the economy and contribute to the closure of an estimated 38 small businesses every day.
Kyle had made the bill personal. He told Business Matters in May that he would not “resile from delivering” what he called a “step change in the relationship between all larger businesses and their supply chains”, adding: “Sixty days is a solid, reasonable outer limit for paying a small business.”
With the CBI and the British Retail Consortium already pressing concerns ahead of committee stage, the departure of the bill’s most vocal defender hands corporate lobbyists an opening at an awkward moment for small firms. Whoever inherits the brief faces an immediate test of nerve: hold Kyle’s line, or let the toughest payment rules in the G7 soften on the way to the statute book.
The churn itself will grate. Kyle’s successor will be the third business secretary since Labour took office two years ago, an unhappy echo of the revolving door at the business department that firms endured under successive Conservative administrations. Kyle used his ten months in post to promise an active, interventionist department, setting a target of nurturing Britain’s first $1trn company and pledging to make the UK the best place to start and scale a business.
His exit also lands amid a wider reorganisation of the Whitehall machinery that matters to growing firms. Officials have been asked to draw up plans to close the science and technology department, with its responsibilities split between the business department and the culture department, a proposal that has already provoked a revolt from tech leaders. The next business secretary could therefore take on a substantially bigger empire, and a year of restructuring to go with it.
Burnham, for his part, has promised to “bring forward the biggest changes in the last 40 years”, with a return to public ownership, a 10-year plan for the country and cost-of-living measures expected as early as Tuesday.
For SMEs, three things now bear watching: who gets the business brief, whether the late payments bill survives committee stage intact, and where the science department’s funding streams end up. On all three, owners will hope the new Prime Minister moves faster than the reshuffle rumour mill.
