Peter Kyle has been removed as business secretary on Andy Burnham’s first day in Downing Street, stripping the government’s flagship late payment crackdown of the minister who built it while the bill remains midway through parliament.
Kyle became the third cabinet minister dismissed on Monday afternoon as the new Prime Minister assembled his own top team, following the exit of the housing secretary and deputy prime minister. The chancellor was also sacked as Burnham moved swiftly against ministers most closely associated with the previous leadership.
No successor has been confirmed for the business brief. It has been suggested that a former holder of the role could return to the position handed to Kyle only last September.
For business owners, the more pressing question is not who next leads the Department for Business and Trade, but what happens to the agenda Kyle leaves behind.
Chief among that agenda is the Small Business Protections (Late Payments) Bill, introduced to parliament in May. The legislation caps payment terms at 60 days for large firms paying smaller suppliers and imposes mandatory interest of 8 per cent above the Bank of England base rate on overdue invoices.
The bill also grants the Small Business Commissioner powers to investigate and fine serial offenders. Government figures estimate poor payment practices drain roughly £11 billion a year from the economy and contribute to the closure of around 38 small businesses every day.
Kyle had made the bill a personal priority, framing it as a step change in the relationship between larger businesses and their supply chains. He described 60 days as a solid and reasonable outer limit for paying a small business.
With major business groups 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 whether to hold the line or allow the toughest payment rules in the G7 to soften before becoming law.
The turnover itself will frustrate the business community. Kyle’s successor will be the third business secretary since the party took office two years ago, echoing the instability firms endured under previous administrations.
Kyle used his ten months in post to promise an active, interventionist department, setting a target of nurturing Britain’s first $1 trillion company. He also pledged to make the UK the best place to start and scale a business.
His exit lands amid a wider reorganisation of Whitehall that matters to growing firms. Officials have been asked to draw up plans to close the science and technology department, splitting its responsibilities between the business and culture departments, a proposal that has already provoked a revolt from tech leaders.
The next business secretary could therefore take on a substantially larger remit alongside a year of restructuring. The reshuffle arrives as the new Prime Minister promises the biggest changes in four decades, including a return to public ownership and cost-of-living measures expected as early as Tuesday.
For small and medium-sized enterprises, three things now bear watching: who receives 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 administration moves with clarity and speed.
