The Securonomics Revolution? Labour’s redprint for reshaping Britain’s economy
October 6th, 2023
The year is 2025. Out steps Chancellor Rachel Reeves through the famous door of Number 11 Downing Street – Budget box held proudly aloft – and her trusty team of Labour advisors celebrating the dawn of a new fiscal era. If the current polls are to be believed, it very much could happen.
The former Bank of England economist has enjoyed an impressive road to stardom having been appointed Shadow Chancellor in 2021 following a variety of shadow ministerial posts under Ed Miliband. PPE at Oxford was followd by a successful banking career, and Reeves now stands on the cusp of becoming the UK’s first ever female Chancellor of the Exchequer.
There’s no doubt that under the leadership of Keir Starmer, Labour’s approach to tax and spend has very much deviated from the radical approaches championed by his immediate predecessor. Both Reeves and Starmer have stressed the fiscal limitations which will constrain any future Labour government spending, while in opposition, Reeves’ iron grip in ensuring all policy announcements are fully costed has helped rebuild Labour’s position as a credible government in waiting, whilst also taking the wind out of the sails of the Conservative’s “party of business” moniker.
Under Reeves, Labour have embarked on two core economic missions. The first – and by far most challenging – securing the trust of the British public over control of the public purse. It’s no coincidence that Lisa Nandy, Wes Streeting and other big hitters within the Shadow Cabinet have been unable to unleash bold, expensive policy announcements in their media interviews – the hand of Reeves hovering over their shoulder and the message discipline of fiscal competence running through every vein of Labour policy making. Reeves has learnt the lesson which has scuppered many a Shadow Chancellor – that economic power can only be gained through public trust. And public trust can only be gained through disciplined spending promises.
The second core economic mission which Reeves has sought to drive in partnership with the party Leader is to position Labour’s fiscal priorities around those of the country. Borrowing to fund sustainable infrastructure projects, greater investment in the NHS and reforming the education system are all policy priorities which chime with the party’s core audience – the centre ground. The party hasn’t sought to tie itself in fiscal knots over issues about which it knows the electorate is not concerned – but has married spending priorities with the public consciousness – an approach which Reeves believes will result in electoral success.
Packaging Labour’s economic message into a simple, digestible, and – critically – electable summary however has been Reeves’ Achilles heel. While some may describe her economic position as closely aligned to the New Labour project, Starmer and Reeves have struggled to define their fiscal strategy in quite the same way. Reeves has unveiled that Labour’s economic policy will be branded under the umbrella term “securonomics”, focusing on economic security and the resilience of industry in an uncertain global economy. “It shows how an active, strategic, state will work in harmony with vibrant and open markets” said Reeves in Washington last month, yet for Labour it will be concerning that a rebrand of its economic strategy received limited coverage in the broadsheets, with many journalist being more interested in the Shadow Chancellor’s decision to fly in business class rather than economy.
For securonomics to work, Reeves understands that winning the war on the domestic battlefield is only part of the solution. The trip to Washington to meet with counterparts in the US has underpinned the Shadow Chancellor’s belief that garnering the support of international advocates is essential to persuading the UK electorate that she and Keir Starmer have the credibility for leadership – and that one time worries of capital flight and a crumbling pound under Labour are no longer rooted in political reality.
Yet what of Reeves’ personal appeal? Disappointingly for the Shadow Chancellor, her public popularity has struggled to take off in the way she may have hoped. Current YouGov projections place both her and Jeremy Hunt at 18% on “who would make the best Chancellor” with an enormous 65% of the sample unsure about their preferred choice. It may be unrealistic to expect Reeves to be as embedded in the public psyche as Gordon Brown was in 1997, but to be level pegging with a Chancellor who became infamous for fighting junior doctors, losing a Conservative leadership contest and needed his political life salvaged by Liz Truss, will be a bitter pill to swallow.
Ultimately, Rachel Reeves will be desperate to ensure Labour is not just the party of workers, but the party of enterprise. Partnering with private investors and building bridges with the City have been central to the Shadow Chancellor’s approach – recent roundtables with senior business leaders have not happened by accident. Business must feel a new sense of confidence engaging with Labour under the fiscal stewardship of Reeves – commercial objectives and Labour policy now working in harmony to deliver outcomes, no longer the polarising forces they once were.
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