City minister Simon Kirby has seen his responsibilities for Brexit handed to Baroness Neville-Rolfe.
Kirby was handed the role of economic secretary to the Treasury after the Brexit vote when May came to power.
The Treasury has stressed that Kirby's remit remains the same as his predecessors, with the added Brexit work hived off to commercial secretary Neville-Rolfe.
Neville-Rolfe has been described as possessing a "more corporate" mindset than the entrepreneurial Kirby, with officials keen to note her experience as a Tesco executive.
A senior Tory backbencher told City A.M. that Kirby had been “thrown in at the deep end” with little experience of the City, adding that the decision may make the City minister's position untenable.
“The most important thing to promote the City at the moment is to fight fire with fire when it comes to places like Paris, who have guys marauding all over London. We need a City minister out there saying what we are going to protect different sectors.
“It's difficult to understand how he can continue that role if he doesn't have that part of the job. He can't possibly stand up for the City and not have the Brexit part of the portfolio.”
Multiple Square Mile sources have told City A.M. that the Brighton Kemptown MP had struggled in the role, with one noting that Kirby had “gone down like a bag of cold sick” with industry groups, in particular.
“He never seemed switched on in the brief at a time when an awful lot of the sector is very febrile and nervous,” they said.
However, they add that the decision will likely have little impact on the City's future post-Brexit, with chancellor Philip Hammond taking personal responsibility for the sector.
And with Hammond teaming effectively with Brexit secretary David Davis, they added: “Simon Kirby was about as high on my level of priorities as Jeremy Corbyn.”
Nonetheless, shadow City minister Jonathan Reynolds said: “Although the lack of continuity at this point in the process is alarming, frankly we don’t care who it is the government chooses to oversee the process, as long as they can provide some clarity to the financial services sector with at least a rough outline of what the long-term plan for the City will be.
“We are aware of institutions who feel forced to relocate some functions abroad now to avoid being confronted with a situation in two years’ time they are completely unprepared for. The government must start providing some answers and guidance.”