Dominic Raab has been appointed deputy prime minister and justice secretary, as Rishi Sunak began appointing his new cabinet.
Sunak took over as prime minister on Tuesday morning with a promise to “fix” the “mistakes” made by Liz Truss.
Jeremy Hunt has been kept on as chancellor, ahead of the long-awaited medium-term fiscal plan due on Monday.
Raab is a key ally of Sunak who warned Truss’ economic plans were “an electoral suicide note”.
He served as deputy prime minister to Boris Johnson and briefly ran the country while the then prime minister was hospitalised with Covid.
Simon Hart, a former Welsh secretary, has been appointed chief whip and will be in charge of enforcing discipline in a party that has been consumed by infighting.
James Cleverly, a close ally of Boris Johnson and Liz Truss, will remain as foreign secretary. Ben Wallace stays as defence secretary.
Several allies of the former prime minister have left cabinet, including Jacob Rees-Mogg, Simon Clarke and Wendy Morton.
More than an hour after Truss defended her economic strategy in her farewell speech from Downing Street, Sunak stood outside No. 10 criticising her brief tenure.
Sunak said his predecessor, whose 49 days in office made her the shortest-lasting PM in history, was “not wrong” to want to drive up growth, describing it as a “noble aim”.
“But some mistakes were made. Not born of ill will or bad intentions – quite the opposite in fact. But mistakes nonetheless,” he added.
“I’ve been elected as leader of my party and your prime minister in part to fix them – and that work begins immediately.”
Sunak, 42, became the UK’s first Hindu PM, the first of Asian heritage and the youngest for more than 200 years when he was appointed by King Charles at Buckingham Palace.
The pound soared to the highest level since before Truss’ disastrous mini-budget and the cost of government borrowing dropped.