BAE Systems is a major defence firm in Barrow-in-Furness. Barrow’s fortunes have often risen and fallen with the navel armaments division based in the town, even if it has never gained as much as many have hoped from hosting BAE’s factories. However, things may be looking up for Barrow, as BAE’s submarine building facility now has a 30 year order book, partly due to a joint submarine project included in the AUKUS trilateral security treaty between the UK, the US and Australia.
In the past, the impact of investment and activity at the massive BAE Systems plant has not always flowed across the town, which continues to have some of the most deprived neighbourhoods in the country and a number of social problems associated with poverty.
Recognising this historic problem, and this time to try to capitalise on these lucrative defence contracts, the local MP, top civil servants and the local council have formed a team that will work with the company to seek to ensure the major increase in BAE Systems workforce in the town and other developments also benefit the area more generally.
With over a £1bn worth of contracts coming to the town through BAE System’s work on submarines, this would seem to be a major opportunity to help Barrow, not least due to the need to attract and retain an enlarged specialised workforce to the area.
But, while in the short to medium term, such ‘military Keynesianism’ could potentially benefit Barrow, more generally, is this really the best way for Britain to go?
John Maynard Keynes suggested that the state had a responsibility to use its fiscal power (raising money through taxation and public borrowing) to stimulate the economy through spending when economic activity was lower than its potential. The idea of ‘military Keynesianism’ is the specific use of investment and procurement in defence as an economic stimulus.
Unlike other forms of Keynesian stimulus, focussed on the wider economy, its military version is seldom dismissed even when governments are adopting free market policies. In this instance, while referred to as an aspect of ‘Levelling Up’, the utilisation of a significant military project – the production of the new Dreadnought class submarines and the associated supply of a new submarine to Australia as part of AUKUS – is pretty clearly an example of locally-focussed military Keynesianism.
Perhaps best typified by the actions of what is sometimes referred to as the Military-Industrial-Complex in the USA after the Second World War, military Keynesianism is behind claims that many jobs depend on the continuance of the UK’s national security being equipped by UK based firms.
If the state is going to use its considerable fiscal weight to stimulate specific economic sectors, is defence the best choice for the country, even if due to its long history of defence manufacturing, it is the right choice for Barrow?
There are clearly arguments that the UK retains the need for defence, but is it necessary that the UK remains a large scale arms exporter? It is notable that one of the largest regular arms fairs takes place in London, but arms dealing can involve the country in relations with regimes that many voters find repugnant or unacceptable. So perhaps there is another way to stimulate the UK’s economy which would involve less moral compromise.
How about funding the green transition?
One much talked about alternative to stimulating economic activity through defence expenditure is a form of Green New Deal. There have been a number of attempts to push this form of Green Keynesianism in the UK, most significantly in the 2010s by the cross-bench alliance of Ed Miliband (Labour), Caroline Lucas (Green) and Laura Sandys (Conservative) promoting a UK version of a ‘Green New Deal’.
For a while, it looked as if the Conservative Government was minded to pivot towards an emphasis on support for green technologies, through both regulation and fiscal measures. However more recently, Prime Minster Rishi Sunak has – in his actions and his pronouncements – changed direction, now responding to what some have referred to as a ‘green backlash’.
Of course, in the end this is not necessarily an either/or proposition; we could continue funding defence procurements, while also making a major and accelerated shift into a state-supported transition to green technology. However, while the idea of national security never goes out of political fashion, the support for green economic development seems to be subject to the personal whims of politicians.
Rishi Sunak and his government seem to be already stepping back from political commitments to navigating the UK to Net Zero, even if these commitments have not been backed up by extensive investment and government actions in any case. The lack of a commitment to some form of ‘Green New Deal’, is in stark contrast to the continued (if sometimes uneven) support for investment in defence and arms manufacturing.
A ‘Green New Deal’ could bring together a range of issues where government support would allow the UK to shift away from a period of stagnation and economic difficulty following the decision to leave the EU.
This form of green Keynesianism would likely involve a shift to the development of, and manufacture of renewable and green technologies. This could lead to major investment in improving and extending public transport networks, as well as clean energy for wind and solar, to new technologies around marine and tidal power. There might also be a shift in the structure of UK agriculture, as well as research and development into the best ways to deal with the effects of climate change while trying to reduce the UK’s overall emissions (Net Zero).
All of this – as is constantly said – takes money but the key thing is by spending the money through a ‘Green New Deal’, the UK could also seek to further social justice and mitigate the effects of climate change on the most vulnerable across the country. And making the UK a leader in green technology (building on our extensive research community around these issues) could provide new export markets for UK based manufacturers.
There is significant support for a green pivot, whatever Rishi Sunak and his advisors may think. But the key problem is that for politicians and those who advise them, aggression from other states is still seen as a bigger potential threat than the very real climate crisis. This is what makes spending on defence relatively uncontentious, but spending on a green transition seem revolutionary and politically risky.
So while no-one should ignore security, the idea that we can just put off measures to reach Net Zero, or not be concerned with developing cleaner technologies, is not good for Britain. The climate crisis will not wait for us to decide to enact a green transition, it will just sweep away much we hold dear!
In the future, this will be seen as our generation’s fatal myopia!