British cabinet reshuffle: Chris Heaton-Harris remains Northern Ireland secretary and Jeremy Hunt as chancellor

Rishi Sunak has made the first appointments of his cabinet reshuffle by keeping Jeremy Hunt as chancellor, Chris Heaton-Harris as Northern Ireland secretary and appointing Dominic Raab as deputy prime minister and justice secretary, after the departure of nearly a dozen cabinet ministers.

The new prime minister also reappointed James Cleverly as foreign secretary, Ben Wallace as defence secretary and Suella Braverman as home secretary, just days after she left the role for breaching the ministerial code with an email leak.

The appointments are a sign Sunak is attempting to reach out across the party, given Wallace and Cleverly were prominent supporters of Boris Johnson, while Braverman is influential on the party’s Eurosceptic right.

The decision not to have a change of personnel will be viewed as an attempt by Sunak not to upset the markets after weeks of turbulence over the Conservatives’ economic plans under Liz Truss’s administration.

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However, Penny Mordaunt was left embarrassed after being reoffered her old job as Commons leader instead of the foreign secretary post she had pushed for, probably as punishment for trying to challenge Sunak’s coronation by forcing a contest earlier this week.

Steve Barclay resumed the role of health secretary that he had held at the end of Johnson’s administration, and Michael Gove, who was fired as levelling up secretary by Johnson, also got his old job back.

Others handed back their previous posts were Kemi Badenoch, the trade secretary, and Michelle Donelan, the culture secretary.

In the clearest signal Sunak wanted to placate Truss’s supporters, he kept Thérèse Coffey – the former deputy prime minister – in the cabinet, moving her to the role of environment secretary.

Mel Stride, Sunak’s campaign manager during the summer leadership contest, was also catapulted into the cabinet from his role as an influential backbencher chairing the Treasury select committee. As work and pensions secretary, he will play a key role in the debate about whether to raise benefits in line with inflation or pay.

The pound rose to its highest level since before Truss’s mini-budget last month after Sunak’s appointment as prime minister.

Raab returns to the roles he held under Johnson, as deputy prime minister and justice secretary. Simon Hart, another cabinet minister from the Johnson era, has been brought back in to restore party discipline as chief whip.

Sunak also appointed Nadhim Zahawi, another key Johnson supporter, as party chair, and his own key ally, Oliver Dowden, as chancellor of the duchy of Lancaster – a problem-solving role in the Cabinet Office. Grant Shapps, the former transport secretary who filled in as home secretary for less than a week, is moving to be business secretary.

Alister Jack and Chris Heaton-Harris were reappointed as secretaries of state for Scotland and Northern Ireland respectively. David TC Davies was appointed the new Wales secretary and Lord True was made lord privy seal and leader of the House of Lords.

Several senior figures quit the government on Tuesday, with Jacob Rees-Mogg stepping down as business secretary and Brandon Lewis resigning as justice secretary. Sunak sacked Chloe Smith as work and pensions secretary and the under-fire Wendy Morton as chief whip.

Others leaving government include Jake Berry (Conservative party chair); Robert Buckland (Welsh secretary), Ranil Jayawardena (environment secretary) and Kit Malthouse (education secretary). Vicky Ford, the Foreign Office minister for development who attended cabinet under Truss, has left the government too.

Sunak met departing ministers in his House of Commons office, a common tactic used to spare those sacked the indignity of walking up Downing Street in front of the cameras.

Rees-Mogg was a close ally of Johnson and Liz Truss and attacked Sunak during his failed summer leadership campaign.

Earlier, the new British prime minister Rishi Sunak warned of “difficult challenges to come” to address the profound economic crisis.

Mr Sunak said mistakes were made by his predecessor Liz Truss but promised he will deal compassionately with the “difficult decisions” to be made by his new government.

Mr Hunt said he was “honoured” to serve under Rishi Sunak and for the British people.

“It is going to be tough. But protecting the vulnerable - and people’s jobs, mortgages and bills - will be at the front of our minds as we work to restore stability, confidence and long-term growth,” he tweeted.

Dominic Raab has regained posts he held under Boris Johnson, before he was sacked by Liz Truss, having criticised her strongly during the summer leadership contest.

James Cleverly has been reappointed foreign secretary, Ben Wallace reappointed defence secretary and Suella Braverman as home secretary.

Downing Street has announced the reappointment of Penny Mordaunt as lord president of the council and leader of the House of Commons but the announcement is a being viewed as a snub for Mordaunt who may have hoped for a promotion after running in the leadership race.

Making his first public comments outside 10 Downing Street just before 12pm after having accepted King Charles III’s invitation to form a government at Buckingham Palace, Mr Sunak praised his predecessors Ms Truss and Boris Johnson, but also pointed to their shortcomings.

Of Ms Truss, who vacated Downing Street as the shortest-serving British prime minister in history, he said: “She was not wrong to want to improve growth. It is a noble aim. I admired her restlessness to create change, but some mistakes were made — not borne by ill will or bad intentions, quite the opposite in fact. [But they were] mistakes nonetheless.”

Mr Sunak said he had been elected as leader of the party, and as prime minister, in part to fix them and that work would begin immediately.

“I will place economic stability and confidence at the heart of this government’s agenda.

“This will mean difficult decisions to come. You saw me during Covid doing everything I could to protect people and businesses with schemes like furlough. There are always limits but I promise you this — I will bring the same compassion to the challenges we face today.”

He said the government he would lead would not leave the next generations of children and grandchildren with a debt to settle that this generation was too weak to pay itself.

“I will unite our country not with words but with action ... Trust is earned and I will earn yours.”

Earlier on Tuesday, Ms Truss held her last cabinet meeting and made a brief statement as she left Downing Street.

“Our country continues to battle through a storm. But I believe in Britain. I believe in the British people and I know that brighter days lie ahead,” she said.

Mr Johnson, who withdrew from the leadership contest on Saturday evening, had been criticised by some colleagues for not congratulating Mr Sunak on his success. However, he tweeted just after 12pm congratulating his former chancellor of the exchequer on his appointment.

Taoiseach Micheál Martin congratulated Mr Sunak and said there is a “real opportunity” to find an agreement on the Northern Ireland Protocol.

He said in a statement: “Building on work already under way, there is a real opportunity for the EU and UK to find jointly agreed solutions on the issues pertaining to the protocol, and I urge Prime Minister Sunak to move quickly to substantive engagement with the EU on that basis.”

Mr Martin added: “I am committed to a strong and deep British-Irish relationship and I look forward to early engagement with Prime Minister Sunak on the important issues we face on these islands and globally.”

Earlier, Tánaiste Leo Varadkar said “we shouldn’t be naive” about the reality that Mr Sunak was an early supporter of Brexit but there is “optimism” about a new focus on an agreement to resolve the dispute over the Northern Ireland protocol.

Speaking on his way into Cabinet, the Fine Gael leader, who is due to return to the Taoiseach’s office in December, said: “I do think he’s somebody who understands the economy and understands how trade works, understands how international politics works.

“We never saw any magical thinking from him that maybe we saw from other politicians.” - Additional reporting The Guardian