Policy and campaigns
On 5 September 2025, 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.
Rt Hon Peter Kyle MP 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.
Other new faces in the department include Sir Chris Bryant MP, who brings long parliamentary experience across several briefs; Jason Stockwood, appointed as a new lord and Minister for Investment, who is a businessman, joint majority shareholder and former chairman of Grimsby Town FC, and a former chief executive of Match.com; Michael Shanks MP, who previously served at the Department for Energy Security and Net Zero and represents Rutherglen; and Blair McDougall MP, a Scottish Labour politician and political adviser who was head strategist to the Better Together campaign during the 2014 independence referendum.
The REC is grateful to the former Employment Minister Justin Madders MP and former Secretary of State Jonathan Reynolds MP for their constructive engagement with the recruitment sector, both in government and when in shadow roles. We look forward to working closely with the new ministers and continuing this collaborative relationship.
At the Department for Work and Pensions, Rt Hon Pat McFadden MP replaces Rt Hon Liz Kendall MP as Secretary of State. Crucially, the department will now take responsibility for the Skills Agenda. Rt Hon Baroness Smith of Malvern continues as Minister of State for Skills and Women and Equalities, serving jointly across Education and Work and Pensions to ensure cross-departmental coordination.
Darren Jones MP becomes Chief Secretary to the Government, while James Murray MP takes on his former role as Chief Secretary to the Treasury. Baroness Minouche Shafik, former Deputy Governor of the Bank of England, has been appointed as the Prime Minister’s economic adviser. Rt Hon David Lammy MP takes on the role of Deputy Prime Minister alongside his existing post as Secretary of State for Justice.
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. Ministers remain committed to its provisions.
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 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.
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