Some Interesting gossip – and no more than gossip – I have been hearing for the last couple of days. I work in the public sector (nothing to do with defence) and some quite sensible people (we do have them) have been muttering that the hole that the bank rescue is knocking in public borrowing limits may (paradoxically) be good news because the Government “may as well” borrow bit more, ease pressure on spend, and get some money moving around the UK.

What is driving this is the suspicion that the medium term problem is the recession, not the financial crisis, and the Government may be mulling over a serious spending programme, funded by borrowing, to try to kick-start the economy: Good, old-fashioned keynsian stuff. And today Robert Peston relates this line in his blog on the BBC.

Now, if this were true, my current gloom will be shown to be completely mistaken and I will happily admit to having been utterly wrong – because the fleet could benefit mightily. This is because naval shipbuilding generates jobs and income and can be exempted from EU competition requirements. In other words, we can ensure that the business stays in the UK. So if a Keynsian spending programme was planned, then there would be a very good case to be made for a fleet expansion programme because it ticks so many Keynsian boxes – combining retention of heavy industry and high technology capacity, UK skills retention (in depressed areas), possible export orders as unit costs reduce etc etc. Even naval manpower expansion has upsides as it involves skills training.

Obviously this requires a 180 degree turn by both Treasury and Government. But if that was ever to happen, now would be the time. And if it happened, every possible effort should be made to make the case for more and better ships. Because the chance will not come again.