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Remember “securonomics”? It was the buzzword Rachel Reeves gave to her economic philosophy back before the election.
The idea was that in the late 2020s, the old ideas about the way we run the economy would or should give way to a new model.
For a long time, we ignored where something was made and by whom and just ordered it in from the cheapest source. For a long time, we ignored the security consequences of where we got our energy from. The upshot of these assumptions was that over time, we allowed our manufacturing base to become hollowed out, unable to compete with cheap imports from China. We allowed our energy system to become ever more dependent on cheap Russian gas.
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The whole point of securonomics was that it matters where something is made and who owns it. And not just that – that revitalising manufacturing and energy could help revitalise “left-behind” corners of the economy, places like the Midlands and the North East.
Back when she came up with the coinage, Joe Biden was in power and was pumping billions of dollars into the US economy via the Inflation Reduction Act – a scheme designed to encourage green tech investment. So securonomics looked a little like the British version of Bidenomics.
That’s the key point: the “security” part of “securonomics” was mostly about energy security and supply chain security rather than about defence.
But when Rachel Reeves became chancellor, it looked for a period as if securonomics was dead on arrival. Most glaringly, Labour dramatically trimmed back the ambition and scale of its green investment plans.
But roll on a year or so, and we all know what happened next.
A new era
The Democrats lost, Donald Trump won, came into office and swiftly triggered a chain reaction that panicked everyone in Europe into investing more in defence. Today, much of the focus among investors is not on net zero but on defence.
All of…
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