Rightwing Economic Myths Could Derail Burnham's Project

Andy Burnham devoted his first Labour Party conference speech as prime minister to nostalgia for the Britain of the 1950s and 1960s, when working-class families could sense their lives steadily getting better, according to Guardian columnist Larry Elliott.

The underlying message of Burnham's address, delivered at the 2026 Labour Party conference, was that given time he could rekindle that optimism and return the country to how it was before Margaret Thatcher, Elliott writes in a comment piece published on 1 October.

Much of what Burnham says is true, Elliott argues. The 1980s was a decade of deindustrialisation, asset-stripping and financial deregulation that has shaped modern Britain – and not in a good way, the columnist states.

But Elliott warns that rightwing economic myths could derail Burnham's project, and that the prime minister should look to John Maynard Keynes to destroy them. His argument rests on three propositions that challenge conventional market wisdom.

Borrowing can be good. The first myth Elliott targets is the assumption that public borrowing is inherently irresponsible. In the Keynesian framework he invokes, borrowing is a legitimate tool, particularly when the state needs to invest or to support demand during weak economic periods.

There is no such thing as the 'nation's credit card'. The second myth is the household-budget analogy that dominates British political discourse. Elliott rejects the framing of national finances as equivalent to a family's credit card, a comparison routinely used to justify spending restraint. Governments, unlike households, operate under different constraints, and the analogy obscures rather than clarifies fiscal choices.

Yes, you can buck the markets. The third myth Elliott dismantles is the claim that governments are powerless against financial markets. As previous governments have shown, he writes, administrations can and do defy market pressure when their economic strategy is credible and their politics hold firm.

Elliott's intervention comes at the start of Burnham's premiership, a moment when the new prime minister's implicit promise – to restore the steadily improving living standards of postwar Britain – will collide with the fiscal orthodoxy that has shaped UK policy debates since the Thatcher era.

The columnist's verdict on the 1980s is blunt. That decade's deindustrialisation, asset-stripping and financial deregulation, in his assessment, made modern Britain worse, not better. Burnham's conference speech drew explicitly on the pre-Thatcher decades as his benchmark for national revival.

For Burnham, the practical stakes are clear. If he accepts the right's framing on borrowing, the credit card metaphor and market supremacy, the investments needed to rebuild that 1950s and 1960s optimism will be difficult to justify. If he adopts the Keynesian counter-arguments Elliott lays out, he has an intellectual case for a more interventionist programme.

Elliott's piece sets out that case in advance of the battles over the new government's first budgets and spending decisions.