February was a month of considerable political change – whether at Holyrood or Westminster. The forthcoming change of SNP leader and First Minister by the end of March will lead to a whole range of new policy dynamics and altered personal and political relationships between the Scottish and UK Governments.

Significant machinery of government reforms were recently made by the UK Prime Minister Rishi Sunak – the first significant changes in Whitehall Departments since 2016 and with implications for policy development, co-ordination and engagement. The Prime Minister reversed the trend of an ever-expanding Department for Business, Energy and Industrial Strategy by essentially splitting its policy responsibilities in three – by establishing a Department for Energy Security and New Zero (similar to the former Department for Energy and Climate Change abolished by PM May in 2016), a Department for Science, Innovation and Technology (also transferring some policy functions on data, digital and tech from the Department for Digital, Culture, Media and Sport), and merging the remaining BEIS policy responsibilities for regulation and sectors such as small business, retail, services, hospitality aerospace and automotive with Trade. A merged Department for Business and Trade was created through these machinery of government changes.

The challenge or opportunity for business and other stakeholders will be to engage well with the new Departments, new Secretaries of State and Ministers (in some cases), and help shape their policy priorities. Shortly after the changes, the Cabinet Office published a document outlining the mission statements and key policy delivery outcomes given to each of the new or reshaped Departments by the Prime Minister.

The Department for Science, Innovation and Technology is focused on raising private research and development investment to make the UK economy the most innovative in the world, and strengthening the UK’s scientific co-operation across the world. An early test of where the new policy framework is heading in support of key Scottish industries such as life sciences, will be whether the recent improvement in UK-EU relations leads to a resumption of the UK’s involvement in the Horizon EU policy framework.

The new Business and Trade Department brings together trade promotion, UK Export Finance, trade negotiations, retained EU and other industrial regulation, with sectoral teams and policy-making across services, many areas of goods trade, and competition policy. This may provide more of a business focus in terms of priorities for live and future trade negotiations, and especially on ensuring that SMEs and key economic sectors are extracting maximum trade preferences and usage from newly implemented UK trade deals. Co-ordination across Whitehall will still be required particularly with Defra, and the two newly created Departments, in the process of negotiating bilateral or multilateral trade deals.

The mission statement and key priorities for the new Business and Trade Department included successfully concluding trade negotiations with India, and working more with businesses on usage of FTAs. The BCC had asked in our Trade Manifesto in 2022 for a Trade Growth Office to be established to raise levels of SME awareness and usage of UK trade agreements in new and existing export markets. We are pleased that our idea will now be implemented by the UK Government and look forward to working with the new Preference Utilisation Unit being created within the merged Department to help achieve these goals and raise export volumes for UK firms.

The Secretary of State for the newly merged Department – Kemi Badenoch – recently made a speech to the Legatum Institute on her key priorities for the new Department for Business and Trade. She outlined her desire to remove barriers to export growth in key markets, one by one, from a list of more than 100 which she and her officials have identified. She also stated the ambition for the UK to become the top destination for investment in the whole of Europe. She reiterated the ambition for further trade deals to remove barriers and boost exports, and also a commitment to rules-based, freer-trade across the globe.

Of particular interest in the North East of Scotland will be the return after 7 years of a dedicated UK Government department for energy policy and the transition to Net Zero. With decisions due of enormous importance to the energy sector, both short and long-term, and potential for policy changes in Scotland depending upon the outcome of the SNP leadership contest, this will be a key UK Government Department for businesses in Scotland’s NE to engage with.

Configurations of UK Government Departments come and go, but given the ongoing impacts of the War in Ukraine on growth and energy security, and the changing patterns of international trade, there has never been a better time to ensure that the voice of business is heard strongly in Whitehall and Holyrood through the Chambers network in Aberdeen and Grampian and across the UK.