Whitehall is on standby for a “mini-reshuffle” as early as Tuesday, with prime minister Rishi Sunak set to appoint a new party chair and break up the sprawling business department.
Sunak has been narrowing down his choice for new Conservative chair after he sacked Nadhim Zahawi, the previous incumbent, nine days ago over his tax affairs.
But the prime minister is also said by colleagues to be preparing to deliver on a promise made last year — in his first bid for the Tory leadership — to break up the Department of Business, Energy and Industrial Strategy.
Two people briefed on Sunak’s thinking said they expected the creation of a new science ministry to help promote the prime minister’s vision of turning the UK into a new “Silicon Valley”.
That new department could see the merger of the science portfolio from BEIS with tech responsibilities currently wielded by the Department for Digital, Culture, Media and Sport.
Sunak also promised in July last year to re-establish an energy department, also stripping that responsibility from BEIS, the department currently headed by Grant Shapps.
“BEIS is struggling,” said one person briefed on Sunak’s thinking. The prime minister is under heavy pressure from Labour and Tory MPs to come up with a more compelling growth strategy.
One option in this Whitehall overhaul would be to put trade responsibilities, including export promotion, back into Shapps’ department, merging it with Kemi Badenoch’s Department for International Trade.
Downing Street declined to comment on Monday night but did not deny that a reshuffle was imminent. The need to replace Zahawi as party chair has sparked a flurry of expectation at Westminster of a wider shuffle.
The Number 10 ethics adviser Sir Laurie Magnus found that Zahawi had breached the ministerial code seven times in his handling of an estimated £5mn settlement with HM Revenue & Customs.
The Conservative chair is a key party role, instrumental in preparing for a general election expected next year and for raising funds for the campaign.
Gordon Brown, the Labour prime minister until 2010, created separate departments for business and energy that were then re-merged into the Department for Business, Energy and Industrial Strategy by Theresa May when she was prime minister.
But energy issues have become hugely political after the UK embraced a “net zero 2050” climate target and since Russia’s invasion of Ukraine, which has sent gas prices soaring and forced many western countries to re-examine their domestic energy resilience.
Sunak said when he was running for the Conservative leadership in July last year that he wanted to re-establish an energy department with a remit to make the UK “energy independent”.
He also promised to create an “energy security committee” charged with keeping the lights on and reforming energy markets to reduce future bills.
Meanwhile, Dominic Raab, the deputy prime minister, is fighting for his political life ahead of an official report into multiple allegations of bullying, which he strongly denies.
Sunak has been urged by figures including the leader of the FDA civil service union to suspend Raab until the investigation by a leading employment lawyer is complete.
Sir Keir Starmer, the leader of the Labour party, is also understood to be considering a reshuffle in the coming weeks.
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