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“It’s deadMPDCGDPYour browser does not support the element.,” says one Labour . “Or perhaps on its deathbed,” adds a wonk. “” was a neologism coined in opposition by Rachel Reeves, now the Labour chancellor. It summed up her plan to introduce a variant of President Joe Biden’s industrial policy to Britain. But the term hasn’t appeared in her speeches since before the election. It did not feature in her address to the Labour Party conference in September nor in the budget in October.Asked about it in Parliament in November, Ms Reeves insisted that “securonomics” was still a guiding principle. “It’s very much in vogue,” insists one official. But a real policy shift has taken place. In opposition Ms Reeves declared that securonomics would mark a clean break with the embrace of globalisation and market liberalisation that characterised New Labour. In office, however, the logic of Britain’s small, open economy has prevailed.Ms Reeves unveiled her big idea at a speech in Washington, , in May 2023. It appeared to draw heavily on an address given the previous month by Jake Sullivan, Mr Biden’s national-security adviser. Trade liberalisation had been gamed by China, echoed Ms Reeves; excessive openness had led to the “hollowing out of our industrial strength”. The watchwords of a Labour government would be resilience and home-grown industries.Big chunks of this agenda do remain. Most notably Sir Keir Starmer’s government seeks , through a state-driven programme of decarbonisation. But the shift in emphasis from the Washington speech has been profound in three ways.The first concerns free trade. Labour may have been a cheerleader for the mercantilism of Mr Biden but it is sounding the alarm over Donald Trump’s version. In a speech on November 14th the chancellor addressed the president-elect directly, declaring that Britain would defend “free and open trade” and wanted to deepen its economic relationship with America. The new government has by and large picked up where the Tories left off on trade: embracing a Pacific-rim agreement and cracking on with other half-done deals.Second, China. In opposition Labour echoed some of the Biden administration’s hawkish rhetoric. Ms Reeves said that a reliance on heavily subsidised Chinese cars would be short-termist and naive; a repeat of the West’s addiction to cheap Russian gas. In office it has been more balanced. So far Britain has not mirrored American and European tariffs on Chinese carmakers. On November 18th Sir Keir became the first British prime minister to meet Xi Jinping, the Chinese leader, since 2018.Officials talk of a relationship characterised by consistency and judiciousness, rather than one jolted by rebellions of backbench China hawks as under the Tories. Ministers seem enthused about the prospect of , listing in London. In November Jonathan Reynolds, the trade secretary, told lawmakers that Britain was “much more exposed” to a trade confrontation between China and the West than Americans; it would be “a much more painful proposition” than people imagined.Third, subsidies. Ms Reeves had initially promised lavish subsidies for green projects, at £28bn ($35bn, 1.2% of ). But that pledge was slashed in February 2024, before it could become a liability in an election that would put Labour’s fiscal discipline under the microscope. Although Ms Reeves now plans to borrow more for investment, the bulk of the money allocated to date has gone on hospitals, school buildings and other bits of the public estate rather than subsidising industrial jobs. In office the government has been admirably restrained in refusing to bail out failing firms such as , a famous shipyard in Northern Ireland.Ms Reeves’s defenders in the party downplay the scale of this shift. She always said that Britain would have to apply the lessons of Bidenomics to suit its circumstances, they say, rather than adopt them off-the-peg. She always wanted to recalibrate Britain’s approach to trade, rather than blow it up. But the change is real, nonetheless, and illuminating.In government Labour is having to work with the grain of the economy as it is, rather than as it wishes it was. Britain was always too exposed to global trade, too reliant on services and in too weak a fiscal position to recreate Mr Biden’s plan to create industrial jobs by splashing cash. Instead a government that wants to encourage growth has realised that it has to play to the country’s strengths.In Washington last year, for example, Ms Reeves lamented how Britain had become reliant on financial services. In her November speech she declared that regulation of the industry had “gone too far” and that the government would tweak it to allow more risk-taking. A Foreign Office review of economic diplomacy is expected to emphasise promotion of services exports such as education and culture.Events across the Atlantic also explain the shift. Labour enthusiasts for securonomics saw how Mr Biden had appeared to weld an urban and graduate-dominated party to its historic industrial electorate. Mr Trump’s triumph in the presidential election in November has helped make the political rewards of industrial strategy seem much less certain.Labour now places a bigger emphasis on housebuilding and the creation of a new generation of asset-owners who can pass wealth onto their children. You can call that “securonomics” if you like. But it resembles Margaret Thatcher’s idea of a property-owning democracy as much as it does the thinking of Mr Biden.
