Burnham must break the rules

Andy Burnham has finally become prime minister, but his timing could hardly be worse. On his first day in Downing Street, he faces at least six interconnected crises: war, inflation, recession, bond-market speculation, political grievance and climate change.

None of these crises was created by Burnham. But every one makes the others more difficult to solve, and conventional Labour politics offers no convincing answer to any of them.

The war in the Gulf is disrupting energy supplies and driving inflation.

GDP per person is falling, investment is weak, and austerity has hollowed out public services.

Hedge funds are testing the government in the bond market, while the Treasury’s fiscal rules prevent the investment Britain desperately needs.

Burnham therefore faces a fundamental choice. Will he serve financial markets or voters?

This video argues that Britain’s problems cannot be solved within the neoliberal economic framework that created them. A currency-issuing government is not like a household. Money is not the real constraint: productive capacity, labour, skills, energy and natural resources are.

Fiscal rules must be replaced by investment rules. Wealth and land must be taxed more effectively. Public services must be rebuilt, monetary policy must serve the country and the transition away from fossil fuels must become Britain’s industrial strategy.

Unless Burnham changes Britain’s economic model, he will fail, and the resulting political grievance could threaten Labour and democracy itself.