EXCLUSIVE: Bob Lyddon is sad that “public coverage aims – not market alternatives – decide the place the cash might be spent”.
Chancellor Rachel Reeves (Picture: Getty)
Rachel Reeves’ inflexible financial philosophy is straitjacketing entrepreneurship and can strangle the free market, a monetary knowledgeable has claimed. In a scathing critique, Bob Lyddon argues that the Chancellor’s method expands the state’s position to offer a “steady, predictable, and safe base” for personal funding—however it devours sources, leaving no room for real market freedom.
The founding father of Lyddon Consulting Companies, who set out his concepts in a prolonged weblog, advised Categorical.co.uk: “Rachel Reeves could seem to not have an financial credo, or to have any concept about how companies and markets work, or to grasp how companies react to authorities intervention, excessive taxation, and excessive regulation.
Reeves says that she’s ‘commited’ to ‘our non-negotiable guidelines’
“There’s a credo, although, and Reeves’ lack of obvious grip derives from her adherence to it. It’s known as Securonomics.
“Labour’s plans spell the demise of the free market, of wealth creation, and of financial freedom.””
This mannequin, unveiled within the November 2025 Funds, reverses Thatcher-era privatisations with out outright renationalisation.
As a substitute, it compels non-public companies in power, water, transport, schooling, well being, and a dozen key industries to comply with state directives by means of laws, incentives, and penalties. Oil and fuel sectors face deliberate inhibition, whereas Internet Zero ambitions take centre stage.
Mr Lyddon’s evaluation paints a grim image: Labour’s £1.64 trillion funding over 10 years—equal to 57% of 2024 GDP—will swell the state-directed financial system. Including this to the present 42% public sector may see authorities controlling practically 60% of UK exercise.
Mr Lyddon stated: “The federal government’s ‘funding’ plans quantity to just about £1.7 trillion (60% of the UK’s 2024 GDP) to be spent on its Internet Zero/Clear Power, Infrastructure, and Industrial methods over the following 10 years.
“Public coverage aims – not market alternatives – decide the place the cash might be spent.”
Such intervention, Mr Lyddon warned, mirrors what he noticed because the EU’s stagnant mannequin. The UK’s EU “Re-set” below Labour may sarcastically align it with this failing system simply as Europe awakens to its flaws.
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He continued: “Reeves’ implementation of Securonomics is essentially the most insidious component within the authorities’s EU Re-set: it would make the UK’s financial system work precisely just like the stagnant EU.”
Internet Zero varieties the credo’s core, promising insulation from power shocks like these from Russia’s Ukraine invasion. But, Lyddon highlights flaws: the UK’s ban on North Sea exploration licences ignores provide dangers, whereas renewables lock in excessive prices.
A latest Institute of Financial Affairs report questioned transition bills, met with authorities spin about changing into a “clear power superpower”.
Mr Lyddon echoed the sentiment, saying: “Internet Zero, with its big allocations of cash and sources in addition to its big physique of laws, is intrinsic to Securonomics: supposedly guaranteeing ample provides of low cost, home-produced power as a part of our steady, predictable, and safe financial base.”
However world developments threaten this imaginative and prescient. Below Donald Trump’s method, US oil and fuel exploitation may flood markets, slashing costs—propane already dropped 13% from 2024 averages. International locations clinging to fossil fuels achieve aggressive edges, undercutting high-cost Internet Zero adopters just like the UK in world commerce.
Lyddon foresees disaster: heavy borrowing crowds out non-public funds, stifling the free market. Job information underscores this—vacancies plunged post-Funds, the sharpest hiring droop for the reason that pandemic. Treasury boasts of “stability” and a capped 25% company tax ring hole, as companies face rising prices and laws.
Mr Lyddon defined: “Spending 6% every year of present UK GDP for 10 years will bloat the scale of the ‘state-directed’ sector of the UK financial system to 15-20% of the entire, on prime of the 42% that’s already the general public sector.
“That leads to 60% of all financial exercise being managed by the state. There isn’t a elbow room for a non-public sector in that financial system.”
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