Jacob Rees-Mogg has quit as business secretary after conceding he would not get a job in Rishi Sunak’s Cabinet despite recanting his claim that the new Prime Minister is a “socialist”.

The old ally of Boris Johnson and Liz Truss was the first to acknowledge on Tuesday that he was out as the newly appointed Conservative leader began a Government shake-up.

Kit Malthouse, who was a deputy under Mr Johnson when he was London mayor, is out as education secretary, a source close to the outgoing Cabinet minister told the PA news agency.

Johnson-loyalist Simon Clarke is no longer levelling-up secretary, while Sir Jake Berry, a champion of the former prime minister’s levelling-up agenda, has been despatched as Tory Party chairman, saying “all good things must come to an end”.

Rishi Sunak becomes new PM
Rishi Sunak is the new Prime Minister (James Manning/PA)

Wendy Morton is out as chief whip after a chaotic period that culminated in farcical scenes during a Commons vote the night before Ms Truss announced her resignation.

Brandon Lewis is no longer justice secretary and Chloe Smith is out as work and pensions secretary despite supporting Mr Sunak in the leadership contest.

A source close to Mr Rees-Mogg told PA: “He knows he was very close to the previous two regimes and it didn’t seem likely he was going to be appointed in the new Cabinet.

“He’s happy to support the Prime Minister from the backbenches.”

During the last Tory leadership contest, Mr Rees-Mogg described Mr Sunak as the “much-lamented socialist chancellor” who had put up taxes during the coronavirus pandemic.

And he accused Mr Sunak of “disloyalty” to Mr Johnson, with many Conservatives blaming the new leader for bringing down the old one by resigning as chancellor.

Rishi Sunak becomes new PM
Jacob Rees-Mogg accused Rishi Sunak of ‘disloyalty’ to Boris Johnson and branded the ex-chancellor a ‘socialist’, a description he later recanted (Stefan Rousseau/PA)

But on Tuesday Mr Rees-Mogg backed down and told The Telegraph he would now serve in Mr Sunak’s Government if asked.

Asked about the “socialist” charge, the MP replied: “That was said in the run-up to the leadership campaign, under very different circumstances.

“The leader of the Conservative Party is clearly not a socialist.”

Ms Morton said she is returning to the backbenches less than a week after the Government’s response to a Labour-led motion on fracking descended into farce.

She was overheard saying she had resigned at that point, but after hours of uncertainty Ms Truss’s No 10 insisted in the middle of the night that she remained chief whip.

Mr Sunak did not keep her on.

Conservative Party Conference 2022
Former chief whip Wendy Morton is returning to the backbenches (Aaron Chown/PA)

Robert Buckland is out as Welsh secretary, writing on Twitter that he is leaving “at my request”.

Ms Smith is no longer work and pensions secretary despite backing Mr Sunak in the leadership race, and Ranil Jayawardena is out as environment secretary.

Mr Lewis resigned as justice secretary as Mr Sunak was holding meetings in his new office in the House of Commons.

“Our party is at a crossroads,” Mr Lewis said in his resignation letter to the Prime Minister.

“We now have an opportunity to reunite and rebuild, and we must take it. We must come together and deliver the mandate we were given by the British people.

“We have a duty to the country to do so, at a time of economic hardship for so many. It is no exaggeration to say that the future of the Conservative Party and everything we stand for is at stake if we do not.

“You will have my support from the backbenches in addressing the economic crisis we face, bringing our party together and delivering on the promises we put forward in the 2019 manifesto, on which we won such an overwhelming majority.”

Mr Sunak pledged to “build a Government that represents the very best traditions of my party” as he seeks to unite the warring factions.