Rachel Reeves wants us to believe that the British economy can be rebuilt on a foundation of "securonomics." It's a catchy term. It sounds safe, sturdy, and reliable in a world that feels increasingly chaotic. But if you look past the polished speeches and the Treasury press releases, there's a glaring hole in the strategy. While the Chancellor is busy trying to insulate the UK from global shocks, she might be accidentally stifling the very dynamism that actually creates wealth.
Securonomics is essentially an attempt to bring supply-side economics into the 2020s. It focuses on resilience, domestic energy production, and "friend-shoring" trade with allies. The idea is that if we stop relying on volatile dictatorships for our gas and cheap components, the economy will become more stable. Stability leads to investment. Investment leads to growth. It sounds logical on paper. In reality, it's a defensive crouch that risks turning Great Britain into a museum of 20th-century industrial policy. Also making waves recently: Finland Is Not Keeping Calm And The West Is Misreading The Silence.
The Resilience Trap
Building resilience isn't free. When a government mandates that supply chains must be local or "secure," they’re usually telling businesses to stop buying the cheapest, most efficient option. That's a tax on productivity. We’ve seen this play out before. When you prioritize security over efficiency, prices go up for everyone. It's a trade-off that Reeves hasn't been entirely honest about.
If every part of a wind turbine or a car battery has to be made in a high-wage economy like the UK, the end product costs more. You can't magically wish away the global price of labor. The risk here is that "securonomics" becomes a fancy word for protectionism. History shows us that protected industries rarely become world-leaders. They become lazy. They stay small. They rely on government subsidies to survive instead of innovating to compete. Additional information regarding the matter are detailed by Associated Press.
Why Private Capital is Skittish
Reeves talks a lot about "unlocking" private investment. She wants the City of London to pour billions into UK infrastructure. But capital goes where it's treated well and where the returns are high. Right now, the UK has some of the most restrictive planning laws in the developed world. You can promise all the "security" you want, but if it takes ten years to get permission to build a data center or a lab, the money will go to Texas or Tallinn instead.
The Chancellor’s focus on state-led investment through entities like the National Wealth Fund is a gamble. It assumes the government is better at picking winners than the market. We know how that story usually ends. Look at the history of British Leyland or the various steel bailouts. The state is great at spending money but often terrible at generating a return on it.
The Missing Ingredient is Risk
You can't have a thriving economy without risk. Securonomics, by its very name, is obsessed with eliminating it. But growth comes from the "frontier" companies—the ones doing things that haven't been done before. These companies don't want a "secure" environment; they want a flexible one. They need a labor market where it's easy to hire and fire. They need a tax system that rewards success rather than punishing it with "windfall" levies every time a sector does well.
Reeves seems to think she can plan her way to prosperity. She’s looking at Joe Biden’s Inflation Reduction Act in the US and trying to create a British version. But the UK isn't the US. We don't have a reserve currency that the world is forced to hold. We don't have a domestic market of 330 million people. We can't out-subsidize the Americans or the Chinese. If we try to play their game, we'll just go broke faster.
The Productivity Puzzle Remains Unsolved
The UK’s biggest problem since 2008 has been productivity. We work long hours but produce less value per hour than the French, the Germans, or the Americans. Securonomics doesn't actually address this. Making things "here" doesn't mean we’re making them better or faster. In fact, if we're forced to use sub-optimal domestic suppliers to satisfy a political mandate for "security," our productivity will likely drop even further.
True productivity gains come from technology and competition. If Reeves wants to fix the UK, she should spend less time on industrial strategy and more time on radical planning reform. She should be making it cheaper to build houses so workers can move to where the jobs are. She should be slashing the red tape that prevents small firms from scaling up. Instead, we’re getting a heavy-handed approach that feels like it was designed in a 1970s think tank.
The Geopolitical Gamble
The "friend-shoring" aspect of securonomics is also more complicated than it looks. Who exactly are our "friends" this week? Trade relations with the US can change with a single election. Europe is currently bogged down in its own stagnation and regulatory overkill. By narrowing our trade focus to a small group of "secure" partners, we're cutting ourselves off from the fastest-growing markets in Asia and Africa.
It's a defensive strategy for a world that Reeves thinks is deglobalizing. But globalization isn't dying; it's just changing shape. The countries that will win are those that stay open and adaptable, not those that try to build a fortress around their island.
Steps to Actually Move the Needle
If you're looking for where the UK economy is actually headed, ignore the buzzwords. Watch the data on business investment and planning approvals. For the government to actually succeed, they need to pivot from "securing" the status quo to "enabling" the future.
- Ditch the planning obsession. The government needs to override local objections to national infrastructure. If we can't build, we can't grow.
- Focus on the cost of energy, not just the source. It’s great to have domestic wind power, but if it’s twice as expensive as energy elsewhere, our manufacturers will still move abroad.
- Stop the tax raids. Constant changes to Corporation Tax and Capital Gains Tax create the very "insecurity" that Reeves claims to hate. Investors need a decade of certainty, not a new "strategy" every two years.
The obsession with security is understandable after the shocks of the pandemic and the war in Ukraine. But an economy that prioritizes safety above all else eventually becomes stagnant. We don't need a more secure version of our current decline. We need a more ambitious version of our potential. Reeves has the right diagnosis—that the UK is stuck—but her prescription of securonomics might just be a very expensive way to stay exactly where we are.
To really get ahead, you should be looking at sectors that thrive despite the government, not because of it. Keep an eye on the UK’s biotech and fintech clusters. These are the areas where we still have a competitive edge. If the state stays out of the way, these industries might just save us. But if they get wrapped up in the "securonomics" blanket, don't be surprised if they start looking for the exit.
