David Lammy has been made deputy prime minister and Yvette Cooper has taken over as foreign secretary as Keir Starmer embarked on a massive reshuffle sparked by the forced departure of Angela Rayner from government.

Immediate changes were required due to Rayner’s resignation as deputy PM and housing secretary after the prime minister’s ethics adviser found she had breached the ministerial code over her underpayment of stamp duty on a seaside flat.

But the extent of the changes, with only a handful of cabinet ministers staying in the same job, indicated concern inside Downing Street that the government is faltering, and the need for a reset.

Shabana Mahmood, the justice secretary, has taken over from Cooper at the Home Office, with Lammy becoming justice secretary as well as his deputy prime minister role.

Pat McFadden, the chancellor of the duchy of Lancaster, has been made work and pensions secretary, overseeing an enhanced department, which will take over Angela Rayner’s housing and communities brief.

The department has been tasked with focusing on the government’s growth plans, and is also taking in the skills remit formerly held by the Department for Education. One official described its remit as “jobs, jobs, jobs”, and McFadden will also have to take on the hugely tricky task of overseeing welfare changes, all but abandoned in July after a major pushback from MPs.

In what was largely a shuffling round of jobs between existing ministers, Liz Kendall, who was the work and pensions secretary, has taken over as science and technology secretary from Peter Kyle, who becomes trade secretary. He replaces Jonathan Reynolds, who becomes chief whip.

Steve Reed, the environment secretary, has been moved to cover Rayner’s housing portfolio, a role he held in opposition. Emma Reynolds, formerly a junior Treasury minister who was out of parliament from 2019 to 2024, is promoted to the cabinet to fill Reed’s old job.

There is also a return to the cabinet for Douglas Alexander, who becomes Scottish secretary – a role he held under Tony Blair’s government.

Darren Jones, recently appointed chief secretary to the prime minister, will also become chancellor of the duchy of Lancaster. Wes Streeting, the health secretary, and Bridget Phillipson, the education secretary, stay in their posts.

Lucy Powell was sacked as Commons leader, replaced by the former chief whip Sir Alan Campbell. Ian Murray, removed as Scottish secretary, also left government.

As the prime minister began reshaping his cabinet team, Rachel Reeves, the chancellor, was confirmed as staying in place early on, as Downing Street sought to reassure the markets that the economy was in safe hands.

The moves by Cooper and Mahmood mean that for the first time ever, the three great offices of state beyond the prime minister – home secretary, foreign secretary and chancellor – are held by women.

Starmer had been widely expected to carry out a reshuffle, with the timetable forced by Rayner’s resignation after the prime minister’s ethics adviser found she had breached the ministerial code over her underpayment of stamp duty on her £800,000 seaside flat.

The first confirmed departure from cabinet was Powell. “This has not been an easy time for the government. People want to see change and improvement to their difficult lives,” she said. The senior Labour MP was swiftly followed out of the door by Murray.

Posting on X, Murray said he was “hugely disappointed” to be leaving government and warned Starmer that he risked “furthering division and despair” by failing to make a strong enough argument for “progressive change”.

The changes come after a shake-up of the No 10 operation earlier in the week.

Another of the ministers to stay, Lisa Nandy, was unexpected. When the reshuffle had been anticipated, hers was often one of the main names tipped as being likely to lose her role.

The number of changes suggests the extent of worry within No 10 as Labour struggles in the polls, while Reform UK spent much of the summer dominating headlines with policies about migration.

Mahmood, who is very highly rated by Downing Street, will be expected to take a grip of immigration, notably what to do about the arrival of asylum seekers on small boats, and where they are accommodated as their claims are processed.

Overall, the changes cement the positions of ministers close to Starmer, while bringing in new people such as Alexander and Reynolds, who had been tipped for promotion.