Jonathan Reynolds’ industrial strategy is straight out of the 60s
Jonathan Reynolds, the new business secretary, has set out a vision for publicly owned services, with private sector partnerships, still under public control – a baffling vision from some eccentric economic bestiary, says Eliot Wilson
Andrew Murray Burnham has been in Downing Street for two weeks now. He promised – new Prime Ministers always promise – change, a fresh start, a new approach. In Burnham’s case this is good news for the polo shirt industry, but what has been surprising is the degree to which, under the surface, the new government leans heavily (and damagingly) on nostalgia.
Last week I wrote about the widespread dismay caused by Burnham’s decision to break up the Department for Science, Innovation and Technology, a Rishi Sunak creation only three years old. There has been little convincing reassurance from the government that science and technology will not be marginalised, but, purely in terms of Whitehall turf wars, the major winner has been the enlarged and cumbersomely titled Department for Business, Innovation, Science and Trade, or DBIST. To sit at the controls of this new dirigiste scourge of “neoliberalism” Burnham chose Jonathan Reynolds.
Reynolds was interviewed by The Financial Times recently, and it was a revealing encounter. A North-Easterner by birth, he is an adoptive member of Team Burnham: he worked as an assistant to James Purnell, now Downing Street Chief of Staff, then inherited his Stalybridge and Hyde constituency in Greater Manchester to enter the House of Commons in 2010. He spent the first 14 months of the Starmer administration as Business and Trade Secretary, pushing hard a witless but voter-friendly programme of industrial nostalgia which the new Prime Minister seems to have embraced.
He was presented with two potentially irreconcilable conundrums: first, to explain how the Burnham administration would be different and better without openly trashing Sir Keir Starmer’s time of office (for all of which Reynolds was a Cabinet minister); second, to underscore the new Prime Minister’s enthusiasm for nationalisation and public ownership while smoothly dispelling the anxieties of the private sector and potential investors.
The approach Reynolds chose was instructive: in a habit acquired under Starmer and showing no signs of repudiation under Burnham, he relied on a now-familiar political form of reification. If you say something often enough and with sufficient earnestness, it becomes (at least in your own mind) true. The real challenge is convincing others. A useful extension of this is that it enables you to reconcile competing concepts; simply ensure both are expressed with equal earnestness.
Brass neck
Accordingly, since Burnham has vowed take on “vested interests” both in the water industry and more widely, Reynolds parses this: without resiling an inch from the Prime Minister’s assertion that there is “certainly a case for more public control, more public ownership of essential utilities”, the business secretary adds that the government must “attract quite a lot of capital to [the water] sector to give it the kind of resilience and the results that people want”.
On the recent nationalisation of British Steel under the Steel Industry (Nationalisation) Act 2026, Reynolds explains that “it has always been about bringing in a private-sector partner”, although there could be a “degree of public control”. So his aim is a publicly owned service, with private sector partnership, still under public control, a baffling vision from some eccentric economic bestiary. What steps the government will, even should, take to address energy costs and overproduction of steel in China are left to the imagination.
His narrative on the Starmer government of which he was a part is astounding in its deftness and sheer brass neck. Starmer and his ministers failed to focus properly on economic growth: “I think we had so many priorities as a government, we didn’t really have a sufficient priority [on growth] because of that”. When you are trying to embrace so many virtues, it seems that one can always slip from your grasp.
When Reynolds is challenged on the Employment Rights Act 2025, which has been stiffly criticised by employers for expanding regulations and increasing the costs of employment, he presents himself as a pacifying, moderating figure.
“I want [business] to come to us and say, ‘Look, if you meet us a little bit of the way, this is what we can do’, because we all have the shared purpose of getting more young people into work.”
This seductive collegiality reeks of the 1960s and 1970s, of union bosses marching into Downing Street for beer and sandwiches: the once-dominant model of the tripartite economy in which the government sat down with trades unions and employers. It was given form in 1962 in the National Economic Development Council, known as “Neddy”, and ran through Harold Wilson’s National Plan of 1965. And we all remember the unrivalled success of the British economy from the mid-1960s into the 1970s.
Fundamentally Reynolds still believes, as does the Prime Minister and as did Sir Keir Starmer and Rachel Reeves, that state intervention is the key to economic growth and prosperity. His new department declares on its under-construction website, “We drive good growth, good jobs and opportunity across the UK. We support businesses to invest, innovate, export and grow, powered by science and technology.” The suggestion lingers that Starmer’s government was not completely off-course: it was playing the right notes, just not in the right order.
Is this how “reindustrialisation” will be achieved? By a programme of grave-robbing for policies of the past which failed on their own terms, hoping somehow that they will succeed in the 2020s? Reynolds is certainly not a man to be deterred by the weight of experience. However he and the new government set about achieving “good growth in every postcode”, to use the Prime Minister’s slightly baffling phrase, it doesn’t feel like it will be cheap. The tax burden is currently 36 per cent of GDP, the highest in 75 years. Don’t expect that trend to reverse any time soon.
Eliot Wilson is a writer