Rachel Reeves’ Economic Approach Under Fire
Rachel Reeves’ strict economic strategy limits entrepreneurship and risks suffocating the free market, according to a financial analyst. Bob Lyddon, founder of Lyddon Consulting Services, contends that the Chancellor’s focus on creating a “stable, predictable, and secure base” for private investment through expanded state involvement consumes vital resources and undermines true market dynamics.
Lyddon outlines his concerns in a detailed analysis, stating: “Rachel Reeves may appear not to have an economic credo, or to have any idea about how businesses and markets work, or to understand how businesses react to government intervention, high taxation, and high regulation. There is a credo, though, and Reeves’ lack of apparent grip derives from her adherence to it. It is called Securonomics.”
“Labour’s plans spell the death of the free market, of wealth creation, and of economic freedom,” he adds.
Understanding Securonomics
Securonomics, introduced in the November 2025 Budget, shifts away from Thatcher-era privatizations without full renationalization. It directs private companies in sectors like energy, water, transport, education, health, and other critical industries to align with government goals via regulations, incentives, and penalties. The oil and gas industries face restrictions, while Net Zero objectives dominate policy priorities.
Lyddon’s review highlights Labour’s planned £1.64 trillion investment over the next decade, representing 57% of 2024 GDP. Combined with the existing 42% public sector share, this could elevate government influence to nearly 60% of UK economic activity.
The analyst notes: “The government’s ‘investment’ plans amount to nearly £1.7 trillion (60% of the UK’s 2024 GDP) to be spent on its Net Zero/Clean Energy, Infrastructure, and Industrial strategies over the next 10 years. Public policy objectives – not market opportunities – determine where the money will be spent.”
Parallels to EU Model and Potential Risks
Such heavy state intervention resembles the European Union’s approach, which Lyddon describes as stagnant. He warns that the UK’s alignment with EU policies under the current government could trap the economy in a similar rut, even as Europe recognizes its shortcomings.
“Reeves’ implementation of Securonomics is the most insidious element in the government’s EU Re-set: it will make the UK’s economy work exactly like the stagnant EU,” Lyddon explains.
Challenges with Net Zero Focus
Net Zero policies anchor Securonomics, aiming to shield the UK from energy disruptions like those from Russia’s invasion of Ukraine. However, Lyddon points to vulnerabilities, including the ban on new North Sea exploration licenses, which overlooks supply chain risks, and the elevated costs of renewable energy sources.
A recent Institute of Economic Affairs study questions the affordability of the transition, prompting government responses emphasizing the UK’s potential as a “clean energy superpower.” Lyddon reinforces these doubts: “Net Zero, with its huge allocations of money and resources as well as its huge body of regulations, is intrinsic to Securonomics: supposedly ensuring abundant supplies of cheap, home-produced energy as part of our stable, predictable, and secure economic base.”
Global Pressures and Domestic Impacts
International developments complicate this strategy. With Donald Trump’s policies boosting US oil and gas production, global markets could see price drops—propane prices have already fallen 13% from 2024 levels. Nations relying on fossil fuels may gain trade advantages, disadvantaging high-cost Net Zero pioneers like the UK.
Lyddon predicts severe consequences: increased borrowing will displace private investment, further constraining the free market. Recent job market data supports this, showing a sharp decline in vacancies after the Budget—the steepest drop since the pandemic. Despite Treasury claims of “stability” and a capped 25% corporation tax, businesses grapple with escalating costs and regulatory burdens.
The analyst concludes: “Spending 6% per annum of current UK GDP for 10 years will bloat the size of the ‘state-directed’ sector of the UK economy to 15-20% of the whole, on top of the 42% that is already the public sector. That results in 60% of all economic activity being controlled by the state. There is no elbow room for a private sector in that economy.”
