The new Secretary of State for Business, Innovation, Science and Trade, Jonathan Reynolds, says Andy Burnham’s government will look to partner with the private sector to drive economic growth and has sought to play down concerns over wide-spread public control of key UK sectors.
He was speaking to the FT in his first interview since returning as business secretary on the same day that the Chartered Institute of Export & International Trade’s director general, Marco Forgione, met with new trade minister Anas Sarwar.
Also in today’s trade news, security experts have called for the UK and EU to be aware of the risk that sanctioned or controlled goods could make their way to Russia through India, with which both have recently signed new free trade agreements (FTAs).
Reynolds calls for private sector partnership
New business secretary Jonathan Reynolds has sought to calm investor anxiety over a perceived push for public control of key sectors by new prime minister Andy Burnham.
Reynolds told the FT the new government would tackle “vested interests” and there was a case for “more public ownership of essential utilities”, but he said it recognises it needs to “attract quite a lot of capital to [the water] sector to give it the kind of resilience and the results that people want”.
Having initiated the public takeover of British Steel as part of the previous administration, he said he doesn’t necessarily advocate for complete public ownership of such companies in perpetuity.
In a wide-ranging interview, he also said the Starmer government didn’t sufficiently prioritise economic growth and defended the merger of the Department for Business and Trade with the Department for Science, Innovation and Technology.
He also said he raised the issue of high business energy costs in the first meeting of the new cabinet last week and that he was cognisant that the Zero Emission Vehicle Mandate, in its current form, could pose a risk to the UK car manufacturing sector.
Forgione meets Sarwar
Reynolds’ new trade minister, former Scottish Labour leader Anas Sarwar, was bought up to speed on issues facing the country's internationally trading businesses by the Chartered Institute’s director general Marco Forgione in a call yesterday (28 July).
Representing the Chartered Institute’s members and the interests of British exporters, importers and supply chain firms more broadly, Forgione told Sarwar that he was committed to working together with him and the new Department for Business, Innovation, Science and Trade. The pair spoke about the importance of highlighting the success stories of exporters from across the UK, as well as navigating evolving relationships with key global partners.
Forgione last week called for trade not to be “sidelined” as a result of the formation of the new mega-business department.
Does India FTA pose sanctions risk?
Data from Strider Technologies, reported in Politico today, has shown a sharp increase in exports of sensitive British military or dual-use goods from India to Russia.
For the period between the start of the war in Ukraine and the start of 2025, in comparison to the previous three-year period, Indian exports of sensitive British items to Russia rose by 180%. A similar story can be told for Swedish and French goods from the EU, up 455% and 98% respectively, and also for sensitive Swiss products, up 131%.
Speaking about the UK and EU’s trade deals with India, both signed since the start of the war, Strider’s chief intelligence officer David Vigneault told Politico that governments needed to take “a clear-eyed view of the competitive landscape alongside these opportunities”.
Daniela Turiccki, the Chartered Institute’s director for defence and export controls, said businesses also needed to be wary.
“The UK-India FTA creates significant opportunities and a competitive advantage for British businesses in a huge market.
“However, any trade involving military or dual-use items must be compliant with the UK’s sanctions regime and export controls. This includes completing end-user undertaking forms to ensure that your goods aren’t being inadvertently redirected into ongoing conflicts via India or any other trade partner.
“Exports that breach control regulations and sanctions are criminal offences which also pose serious reputational risk and possible financial penalties for businesses. Robust compliance processes are a must.”
If you are unsure about your compliance regime for exports to India or elsewhere, you can get support from Daniela and her team via the Chartered Institute’s Export Controls Advisory Practice.
Also in the trade news
· New foreign secretary Ed Miliband will have a “greater role” in the UK’s ‘reset’ negotiations with the EU, alongside the new EU relations minister Hamish Falconer and the prime minister, according to Politico’s London Playbook
· A new report from the National Institute for Economic and Social Research says that the energy crisis caused by the Iran war this year could see inflation rise to 3.8% in early 2027, reducing the value of public spending increases from the government
· The European heatwave has seen water levels in the Rhine – a major waterway for continental supply chains – fall to a 36-year low
Yesterday in trade
· A British firm was handed a six-figure fine for export control breaches
· Burnham announced a renewed focus on tackling youth unemployment through practical education and apprenticeships
· Analysis from Global Trade Alert suggested last year’s EU-US trade deal has curbed the EU’s trade surplus
