Mr Timms' responsibilities at the new Department for Business, Enterprise and Regulatory Reform (DBERR) will include enterprise, growth and business investment, strengthening regional economies and the Small Business Service (SBS).

The Federation of Small Business (FSB) welcomed the appointment of a Minister who has Treasury experience as a boost for small firms.

A spokesman said:

"If the new department does what it says on the tin in terms of regulation, then small businesses and the UK economy as a whole will benefit greatly.

"We hope that Stephen Timms’ experience at the Treasury will have given him some understanding of the dismay felt by small companies following the unexpected and unwelcome tax rise imposed upon them in the last Budget."