Developing 'Securonomics'

Good morning from New Economy Brief.

The concept of economic security is gaining traction in British politics. The Labour Party have made ‘securonomics’ a central frame for their green industrial strategy, and more of the public, particularly swing voters, are longing for more secure personal finances.

But, aside from energy, what would policy that backs up this rhetoric look like? Couldn’t improving economic security be a successful political frame for a holistic economic strategy to build more secure workplaces, secure childcare provision, secure housing, reformed social security, and more? 

This week’s New Economy Brief explores a new paper from JRF’s Graeme Cooke, who proposes economic security as “a lens through which we can diagnose where we’re falling short as a society, and for inspiring and guiding a project of social reform in response”.

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‘Securonomics’ and secure personal finances. Rachel Reeves made ‘securonomics’ a central plank of Labour’s economic policy platform earlier this year, referring mainly to the use of a more active and interventionist state to improve the resilience of supply chains and disperse opportunities for economic growth across the country. (See our explainer here.) The New Statesman’s Anoosh Chakelian documents how the concept of security has spread around the Labour leadership’s communications and policy development. And now, a new paper by Joseph Rowntree Foundation’s Graeme Cooke argues that improving economic security for individuals could be a valuable frame for a political strategy of social reform and electoral success.

• Economic security. In a comment piece for the New Statesman, Cooke explains that the concept of economic security is “rooted in household finances”, how they interact with income, costs, assets and debt, but also how wider factors such as employment, housing, education and health affect households exposure to risks (“concrete, everyday experiences” such as “a cancelled shift, an unexpected rent hike…childcare falling through…rising borrowing costs”) and their ability to cope in a more uncertain world. 
• Political philosophy. He argues that “economic security puts human agency centre-stage, in pursuit of autonomy, control and individuality, drawing on Isaiah Berlin’s notion of ‘positive freedom’, “where true liberty requires far more than the removal of external constraints”; security is “a precondition for people to feel in control of their life, to have a stake in the future, and to believe that daily efforts can pay off and that hard work will be rewarded.“ Improving the economic security of individuals is a logical progression of Labour’s green industrial strategy, which goes beyond neoliberal ideals of the role of the state (beyond free-market ideals of efficiency, towards personal and collective resilience).

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Policies for improving economic security. In policy terms, a strategy for expanding economic security combines “defensive action to protect against harmful insecurities, by placing limits on markets and entrenching state-backed minimums”, with “positive action to advance the foundations of security”. Cooke argues that longer term trends have undermined the foundations of security - such as precarious employment, wealth inequality, rising poverty and the crisis in care services - and proposes various social reforms for a government to protect personal finances in response. Let's take a look at some of these:

• Secure childcare. UK families face some of the most expensive childcare costs in the OECD, which eats into household incomes and holds back earnings from work. (See our Briefing on childcare as an underreported driver of the cost of living crisis.) Cooke explains that “a pro-security response” to the childcare crisis would invest in a system of social infrastructure to protect parents from losing out and “creating statutory care pay, modelled on maternity provision, to enable people to look after loved ones without losing their attachment to the world of work”. The Women’s Budget Group has proposed a universal and free childcare system, delivered as a public infrastructure service on an equal footing with school education, which can largely pay for itself due to the increased tax receipts from parents being able to return to work. 
• Secure housing. Housing has become increasingly insecure in recent years. The proportion of households in the private rental sector has more than doubled over the last 20 years, and more secure tenures such as owner-occupied or socially rented homes have also been in decline. This exposes more of the population to unexpected rent hikes, evictions and a lack of stability. Cooke suggests a strategy to improve security of housing would involve intervening in markets to increase more secure housing tenures, for instance by “establishing a publicly owned master develop to drive the delivery of major new settlements in the public interest (maximising homes for resident-owners and social rent)” and creating “an institutional vehicle to support social landlords to turn the properties of distressed buy-to-let landlords into homes for social and sub-market rent”. (See JRF’s paper for more on this policy, plus our previous briefing on ‘navigating a housing market crisis’ and the idea of a common ground trust.)
• Social security. The value of unemployment benefits (core working age benefit) is at its lowest in real terms for almost 40 years, and only replaces 12% of average earnings, so more and more people are falling into deep poverty. Cooke proposes that “guaranteeing that Universal Credit is enough to afford the essentials would establish a foundation for economic security, as would addressing state-driven insecurity in the benefits system (like the operation of sanctions and the extent of income volatility for low earners).” (See NEF’s proposal for a National Living Income to cover the rising cost of living.)

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Security as a frame for a ‘retail offer’. The concept of economic security is an interesting political strategy that justifies ambitious interventions in markets, whilst aligning with how the public’s views have changed after successive economic crises and linking to their day-to-day concerns about their finances. NatCen’s latest Society Watch has found that concern about money or debt, mental health and work-life balance have all risen since 2018, where 40% of Brits are now “very or extremely worried” about money or debt. A political programme and economic strategy to improve economic security could be a helpful frame for pinning a ‘retail offer’ to voters on the cost of living. Crucially, this framing can help to place the burden of risk onto the status quo, meaning that solutions that might otherwise seem radical are seen in a different light by voters. 

• Swing voters and economic insecurity. The Onward report that identified ‘Workington Man’ as the swing ‘red wall’ voter which could win the Conservatives the 2019 General Election argued there was a “sea change in British politics away from freedom and towards security”. Whilst Labour Together has more recently identified ‘Stevenage Woman’ as the swing voter Labour needs in order to win the next general election, and found that she could be won over with “a politics grounded in providing ‘security’ in the form of secure work, safe streets and a strong nation”. Anoosh Chakelian argues that “security on the left means strengthening the state, protecting the country from geopolitical shocks, enhancing social bonds, and sheltering individuals and places from market forces”, whilst Graeme Cooke argues that social reforms which are justified on grounds of improving economic security can mobilise support from across the political spectrum.