Reynolds Returns as Business Secretary as Small Firms Press for More

Jonathan Reynolds is back running Britain’s business department, less than a year after he was moved out of it and handed the government whip instead. New Prime Minister Andy Burnham reinstated him as business secretary on Monday, and trade groups did not wait long to cheer the move.

But the welcome lands on a department that has changed shape, a Parliament that has now cycled through four business secretaries in two years, and a government whose first big financial call skipped past business costs entirely. The optimism from small business groups this week is about a familiar face, not yet a fiscal commitment.

A Second Tour in a Bigger Department

Reynolds was named secretary of state for business, innovation, science and trade on Monday, taking on an expanded brief that folds the old Department for Science, Innovation and Technology into a new Department for Business, Innovation, Science and Trade. He previously ran the business department from July 2024 until September 2025, when he was moved to chief whip and Peter Kyle took the job.

He returns with company. A new minister for artificial intelligence, Kanishka Narayan, joins him at the cabinet table, and John Healey has replaced Rachel Reeves as chancellor of the exchequer.

The National Enterprise Network (NEN), a network of local enterprise agencies that support start-ups and small firms, welcomed Reynolds back within hours of the appointment. “We warmly welcome the appointment of Jonathan Reynolds as business secretary,” said Alex Till, chair of NEN. “Having served as shadow business and trade secretary, Mr Reynolds has demonstrated a deep understanding of the vital role that micro and small businesses play in driving economic growth.”

Four Secretaries, One Chair, Two Years

Reynolds is not just returning. He is returning to a job that has changed hands three times since Labour took office in July 2024, on top of whoever held it under the previous Conservative government.

The churn is not confined to business. Angela Rayner returned this week as housing secretary, having resigned that post and the deputy prime ministership in September 2025 during an investigation into an alleged underpayment of property taxes. Burnham himself is Britain’s seventh prime minister in a decade, taking over after Keir Starmer announced his resignation on June 22 following a rebellion within his own party.

What Do Small Businesses Want From Reynolds?

NEN and the Federation of Small Businesses (FSB) both want the same broad things: lower business rates, relief from rising National Insurance costs, less red tape and continued momentum on late payment reform. Neither has been promised any of it yet beyond warm words.

NEN said small and medium-sized firms employ 16.9 million people, around 60 per cent of the UK workforce, and generate £2.8 trillion in annual turnover. It added that roughly 16 per cent of trading businesses reported increased turnover in early 2026, a sign of resilience the group wants government policy to reinforce rather than undercut.

This is a golden opportunity to restart the Parliament, go for growth, and get it right on supporting small businesses.

Tina McKenzie, FSB’s policy chair, said that while the organisation was encouraged by Burnham’s pro-business messaging, it wants the government to increase Small Business Rate Relief, tackle rising costs tied to National Insurance increases, and cut unnecessary red tape. The FSB also wants more procurement opportunities opened up to smaller firms, alongside its long-running push, echoed in business reaction to Burnham’s devolution pitch, for more economic decisions to be made locally rather than in Westminster.

• Raise Small Business Rate Relief so fewer firms are pulled into paying full rates
• Address National Insurance cost rises that hit employers directly this year
• Cut red tape that slows hiring and everyday trading
• Keep late payment reforms moving through Parliament without delay
• Open up public procurement so smaller firms can compete for contracts
• Push economic decisions down to local level, closer to where firms actually operate

“For the prime minister to get growth in every postcode, he needs to back the UK’s 5.7 million small businesses which are at the heart of local economies and communities right across the country,” McKenzie said.

Bills Before Business Costs

Burnham’s first substantive policy move as prime minister was not aimed at any of that list. On his second day in office, he announced the government would remove value-added tax (VAT) from domestic electricity bills starting October 1, cutting around £45 from an average annual bill of roughly £1,862.

“We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope,” Burnham said in a statement. Healey framed it as giving households “breathing room on bills” heading into winter, according to TechCrunch’s reporting on the announcement.

The cut is funded by scrapping a digital identity scheme that had been announced by Starmer the previous September, aimed at cracking down on illegal working. The Office for Budget Responsibility (OBR) had estimated that programme would cost up to £1.8 billion ($2.4 billion) between 2026/27 and 2028/29, though the figure was disputed and no dedicated funding line was ever published. The scheme, dubbed BritCard, had already drawn a petition against it that gathered almost three million signatures, one of the largest in British parliamentary history.

The Government’s Money Math Doesn’t Fully Add Up

Not everyone at Westminster is convinced the sums work. Darren Jones, a Labour MP and ally of former prime minister Starmer, questioned whether Burnham’s government actually has the money to cover the energy bill move. “The government will have to set out how it will pay for its new policies at the budget,” he said on X.

Ruth Curtice, chief executive of the Resolution Foundation, a think tank focused on living standards, said the untargeted cut could disproportionately help higher income households. “With bills still set to rise over £150 this October, this money would have been better spent on more targeted support,” she said in a statement.

What we know:

• The OBR pegged the digital ID programme’s cost at up to £1.8 billion over three years, a figure the previous government never fully confirmed
• The VAT change takes effect October 1 and applies to all domestic electricity bills regardless of household income
• The average saving is about £45 a year against a typical £1,862 annual bill

What’s unconfirmed:

• Whether the £1.8 billion was ever actually allocated in a budget line, since the previous government repeatedly avoided the question
• How much of that figure represents real, bankable savings once sunk planning and procurement costs are accounted for
• How the government intends to fund the larger, recurring asks from business groups, such as expanded rates relief, which cost far more than a one-off cancellation

Rate Relief Promised in May, Complicated by June

Some of what business groups want is already, on paper, in motion. A landmark late payment bill introduced to Parliament in May included a 60-day cap on payment terms for large firms paying smaller suppliers, mandatory interest penalties, and small business rates relief of up to 100 per cent for the smallest premises. McKenzie herself called the reforms one area where the previous government had “got things unquestionably right,” and urged Burnham’s team to keep them moving through Parliament rather than restart the process.

Yet the rates picture on the ground has not matched the headline. FSB warned in June that a change to how the Valuation Office Agency calculates rateable values, introduced in April and applied retrospectively, had pulled roughly 104,000 firms into paying rates they previously avoided, concentrated among micro-businesses and smaller operators in regional cities. The group asked the Treasury to lift the rates relief threshold to £25,000 to offset the change. It is the kind of gap, a policy win announced at the top alongside a technical change working against it underneath, that business groups will be watching Reynolds’ department to close.

The Autumn Budget Is Where This Gets Tested

None of this makes Reynolds’ return meaningless to small firms. A minister who already ran trade talks with India and the Gulf Cooperation Council, and who helped steer the government’s initial rescue of British Steel during his first term, arrives with more institutional memory than a newcomer would. NEN and FSB both say that experience is why they welcomed him back so quickly.

But experience is not the same as money, and small firms have heard promises before. Reynolds and Healey will set out the next round of tax and spending decisions at the autumn budget, the first real test of whether this week’s welcome turns into next season’s relief.