Rishi Sunak appoints Greg Hands as Conservative party chair in ...

Rishi Sunak has promoted the trade minister, Greg Hands, to replace Nadhim Zahawi as Conservative party chair as he carries out a mini-reshuffle to try to reassert his grip over his divided party and reshape the government to reflect his priorities.

The prime minister has also conducted a shake-up of Whitehall by splitting the Department for Business, Energy and Industrial Strategy into three new departments and slimming down the culture department.

There were no sackings, with existing ministers moved to lead the new departments. Grant Shapps, the existing business secretary, will lead the new energy security and net zero department, while the trade secretary, Kemi Badenoch, will run business and trade while retaining her equalities brief.

The new science, innovation and technology department will be run by Michelle Donelan, who is understood to be retaining oversight of the online harms bill, while Lucy Frazer will be promoted to the slimmed-down Department for Culture, Media and Sport.

Downing Street said on Tuesday the changes would help the prime minister achieve his government’s five main priorities, and would especially help bring down inflation by improving energy security in the long term.

A spokesperson said: “There hasn’t been enough forward-planning on [energy security], whether that’s on building new nuclear or other issues, and having a new department solely focused on this, led by Grant Shapps, is a way of addressing these longstanding challenges.”

Downing Street would not comment on a report that Sunak had originally offered the science job to Michael Gove, the levelling up secretary. However, a Whitehall source said Gove had “discussed machinery of government changes in general” but had never been formally offered the role by Sunak.

Labour’s shadow secretary for climate change and net zero, Ed Miliband, said “a rearranging of deckchairs on the sinking Titanic of failed Conservative energy policy will not rescue the country”.

Hands, who is seen as a safe choice, has held several senior ministerial briefs, including energy and trade, since he was made David Cameron’s chief secretary to the Treasury after the 2015 election.

The Hammersmith and Fulham MP, who was a staunch remainer, takes over the role before May’s local elections – Sunak’s first electoral test since becoming prime minister. However, Hands’ most onerous task will be getting the party ready for the next general election, which many Tory MPs fear they will lose.

The MP, a former banker who speaks five languages, tweeted a photo of himself with a beaming Sunak, saying: “The work starts straight away.”

Sunak had pledged to create a new energy department during his summer campaign to be Conservative leader, and sources said he had had intentions after entering No 10 of creating an energy and science department and merging business and trade.

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Shapps’s new department has been tasked with securing the UK’s long-term energy supply and bringing down bills that have left millions of families struggling. Meanwhile, Donelan’s department will focus on innovation to deliver improved public services and boost the economy. She is due to go on maternity leave in the spring.

The move is reminiscent of the shake-up carried out in 2007-08 by the last Labour prime minister, Gordon Brown, when he created the Department of Energy and Climate Change, the Department for Innovation, Universities and Skills, and the Department for Business, Enterprise and Regulatory Reform.

Cabinet ministers whose departments are affected were not warned beforehand. The changes come amid a bullying investigation that could also affect the political future of Dominic Raab, Sunak’s deputy prime minister, meaning Sunak may have to conduct a further reshuffle.

It follows the sacking of Zahawi as party chair after multiple breaches of the ministerial code for failing to declare details of his tax affairs.