Andy Burnham must act now to stop Britain falling further in global esteem (Image: Getty)
There’s barely a senior figure in the Labour Party who understands business, and it shows. They’re party careerists, flag-waving activists, union die-hards and hare-brained academics who think money grows on trees, particularly a magical tree called big business, which they can strip clean whenever they need some cash. These economic illiterates all agree that the best way to make Britain richer is to tax more and spend more. The result? A staggering 160,000 businesses have closed in the last six months, as business creation hits the lowest level in decades.
Tony Blair kept the anti-business tendency under control, but it was never going to last. Not with Gordon Brown, Ed Miliband and Jeremy Corbyn in the Labour leadership pipeline. Keir Starmer and Rachel Reeves made soothing noises and said they would work in partnership with business. It was a partnership of sorts – business gave and Labour grabbed all it could. Then came back for more.
Reeves’s £25billion National Insurance raid on employers made young people too expensive to hire, then Angela Rayner’s employment rights reforms made them too risky. Ed Miliband’s energy policy was the final blow. His ban on new North Sea oil and gas drilling was designed purely to impress his activist mates, and he didn’t give a damn about the damage to investment, jobs, production and energy security.
Burnham promised a more pragmatic approach to the North Sea, which we assumed included opening up the Rosebank oilfield and Jackdaw gasfield. Yet as winter looms and the energy crisis builds, he’s still dithering.
Burnham talks about reversing decades of deindustrialisation, but for him the only solution is more government spending. He doesn’t seem to get that having some of the highest energy bills in the world makes it impossible to compete. Now we risk the lights going out in a winter energy crisis.
Norwegian oil giant Equinor has said it may shun further investments in the UK if Rosebank and Jackdaw are not approved. Jim Johnson, chief executive of FTSE 250 engineering group Hunting, says Britain had become “less investable than Venezuela”, blaming our “crazy” politics and untrustworthy politicians. He shut down 80% of his group’s UK operations, and will never invest in this country again concluding: “We have just given up hope on the UK.”
He’s not the only one. Oil giant BP, a FTSE 100 stalwart whose dividends underpin countless pensions, has given up on the UK, selling its North Sea assets. Guess where its taken its expertise? Venezuela. In August, it signed an exploration and production license with the Venezuelan government.
The Latin American country has been devastated by years of socialist mismanagement under Hugo Chávez and Nicolás Maduro. Now one of our biggest blue-chips reckons it’s a better bet than us. Hardly surprising, given that UK Miliband slapped a 78% windfall tax on North Sea oil production, and Healey may drive it higher in this month’s budget.
Financial services is one of our most successful industries, contributing around 12% of the UK’s tax revenues. On Thursday, Chancellor John Healey just called Britain’s banks a “jewel in the crown”. Yet within hours, reports emerged that he was considering hiking the windfall tax on them in his Budget.
The world’s top banker, JP Morgan boss Jamie Dimon, has already warned a City windfall tax could harm jobs and force him to cancel a planned £3billion investment. Yet Healey bans on about miner’s lamps. It’s just laughable.
A bank tax raid will backfire by cutting credit to consumers and businesses, slowing investment and growth, and driving up mortgage rates. Try explaining that to Healey, or anyone in Labour. They won’t understand what you’re talking about. They’ll just rant on about greedy ‘banksters’ and shout you down.
Another foreign entreprenuer has given up. Jensen Huang, boss of silicon chip maker Nvidia, the world’s biggest company, flew into the UK this week to tell us we lack the “entrepreneurial spirit” adding: “If there was a million ways to win, you find the one reason not to do it” He’s laughing at us too.
Millions have fled failed state Venezuela. Last year, a record 69,000 workers abandoned the UK. Bloomberg says we’ve lost £120billion of wealth as billionaires leave or loosen their ties with Britain. Starmer and Reeves started this process. Unless Burnham and Healey wake up, the exodus will only accelerate, and we’ll all be the poorer. It’s no laughing matter.
Andy Burnham Just Made Britain a Global Laughing Stock – ‘Even Worse Than Venezuela’
Andy Burnham’s economic agenda has sparked a fierce debate about Britain’s future, with critics warning that higher taxes, expanded state intervention and uncertainty over business policy could damage the country’s reputation among international investors. Some opponents have gone further, comparing Britain’s economic direction with Venezuela’s troubled experience. But while the comparison makes for a dramatic political headline, the real question is whether the government’s decisions will strengthen Britain’s economy or create new obstacles to growth.
Burnham entered Downing Street promising a different approach to governing. His programme emphasises regional investment, stronger public services, greater powers for local leaders and a more active role for the state in essential industries. Supporters believe this strategy could help reverse years of uneven economic development and ensure that prosperity reaches communities outside London and the South East.
Critics, however, are concerned about the costs, the potential impact on private investment and whether the government can deliver its promises without placing additional pressure on businesses and taxpayers.
The disagreement is becoming a defining feature of Burnham’s early premiership. At its heart lies a fundamental question: can Britain combine ambitious public spending and greater state involvement with the private investment needed to generate sustainable economic growth?
Why the Venezuela Comparison Has Entered the Debate
Venezuela has become a powerful warning in arguments about economic policy because its long-running crisis involved a combination of institutional problems, economic mismanagement, dependence on oil revenues and severe disruption to productive capacity.
Critics of Burnham use the comparison to argue that governments risk damaging prosperity when they rely too heavily on taxation, political intervention and the redistribution of wealth without creating the conditions for businesses to invest and expand.
Their concern is that Britain could gradually weaken its economic foundations if companies face unpredictable regulation, rising costs and uncertainty about future government policy. They argue that successful public services require a productive economy capable of generating the tax revenues needed to pay for them.
However, Britain and Venezuela have fundamentally different economic structures, institutions and international positions. Describing the United Kingdom as already becoming equivalent to Venezuela would be misleading. The comparison is best understood as a political warning about the possible consequences of policy choices, rather than a factual description of Britain’s present condition.
That distinction matters because exaggerated comparisons can obscure the practical questions voters need answered. Is business investment increasing or declining? Are productivity and wages improving? Can the government fund its commitments without destabilising public finances? And are its policies making Britain more attractive or less attractive to employers and entrepreneurs?
Those are the questions that should determine whether Burnham’s economic strategy is succeeding.
The Argument Over Taxation and Business Confidence
One of the central criticisms of Burnham’s programme concerns the relationship between taxation and private investment.
Businesses need confidence that the rules governing their operations will remain reasonably predictable. Decisions about building factories, opening offices, hiring workers or expanding production often involve substantial commitments extending over many years.
When companies expect higher costs or uncertain regulation, some may delay investment while they assess the consequences. Others may redirect new projects towards countries where they believe the conditions for growth are more favourable.
Critics argue that Burnham must avoid creating an impression that successful businesses are primarily a source of additional tax revenue. They believe that policies aimed at raising money from companies can become counterproductive if they discourage the investment and employment on which future tax receipts depend.
Supporters of the government take a different view. They argue that businesses benefit from functioning transport systems, skilled workers, reliable infrastructure and healthy communities. Public investment can improve these conditions and help create the foundations for private-sector growth.
They also point out that the lowest possible tax rate does not automatically produce the strongest economy. Investors consider a range of factors, including workforce skills, political stability, access to markets, energy costs and the quality of public infrastructure.
The challenge for Burnham is to demonstrate that his approach can deliver those benefits without making the costs of doing business unnecessarily high.
If his government can encourage investment while improving public services, it may strengthen the economic case for its policies. If investment weakens and productivity remains disappointing, questions about the balance between taxation and growth will become more difficult to avoid.
Public Ownership and the Future of Essential Services
Burnham has also signalled a willingness to consider greater public control of essential utilities, particularly where existing companies face serious financial difficulties or have struggled to meet their responsibilities.
The future of Thames Water illustrates the complexity of this approach. The company has faced financial pressure and scrutiny over its environmental performance, prompting the government to examine more radical options for resolving its problems.
For supporters of public ownership, essential services should be managed primarily in the public interest rather than according to the demands of private investors. They argue that water infrastructure is fundamental to daily life and that failures can impose significant costs on households, businesses and the environment.
Opponents worry about the financial risks involved. Taking control of a troubled company may require substantial investment, negotiations with creditors and difficult decisions about how future improvements will be funded.
Public ownership does not automatically guarantee efficient management or lower bills. Equally, private ownership does not guarantee that a company will invest sufficiently in infrastructure or protect consumers effectively.
The important questions concern the terms of any intervention, the financial obligations transferred to the state, the governance arrangements and the accountability mechanisms that would apply afterwards.
Burnham’s government will need to show that any move towards public ownership has a credible financial and operational plan. Otherwise, opponents will argue that the state is accepting liabilities without demonstrating how the intervention will improve services.
This is where the debate over Britain’s economic reputation becomes more concrete. Investors will want to understand how the government intends to treat private capital, how contracts will be respected and under what circumstances the state might take control of essential industries.
Clear rules could provide reassurance. Uncertainty and inconsistent decisions could have the opposite effect.
The Cost of Making Big Promises
Burnham’s political appeal rests partly on his promise to make government more responsive to the needs of ordinary people.
His agenda includes stronger regional decision-making, housing development, transport improvements and a renewed focus on economic opportunities beyond the country’s most prosperous areas.
These ambitions address genuine concerns. Many communities have experienced weak productivity growth, limited transport connections and shortages of affordable housing. Regional inequalities can also restrict opportunities for young people and make it harder for businesses to recruit skilled workers.
Yet every major commitment creates a funding question.
The government must decide how much can be financed through existing budgets, how much additional revenue can reasonably be raised and whether borrowing is justified by the long-term benefits of investment.
Borrowing to build productive infrastructure can support future growth, particularly when projects improve transport, energy capacity or workforce skills. Borrowing to cover persistent spending commitments without a credible plan for future revenue presents a different challenge.
Financial markets pay close attention to the government’s fiscal position because investors need confidence that public debt can be managed over time. Rising borrowing costs can place additional pressure on the budget, leaving less money available for public services and investment.
Burnham therefore faces a balancing act. If he moves too cautiously, supporters may accuse him of abandoning the reforms he promised. If he commits to expensive programmes without sufficient funding, critics may question whether his government understands the limits of public finances.
The credibility of his economic programme will depend on how clearly he explains those choices.
Britain’s International Reputation Is at Stake
Britain’s economic reputation matters because the country competes internationally for investment, skilled workers, research projects and major infrastructure developments.
Investors are unlikely to judge Britain on a single announcement. They will consider the broader picture, including the size of its domestic market, the stability of its institutions, access to international trade, the availability of skilled workers and the likely direction of economic policy.
A government that invests in infrastructure, strengthens public institutions and provides predictable rules may improve the conditions for business. Conversely, repeated policy reversals, unclear funding plans and uncertainty over regulation can make long-term decisions more difficult.
Burnham’s emphasis on regional development could offer opportunities if local authorities receive the resources and expertise needed to use their powers effectively. Greater devolution may help communities respond to local economic conditions, but its results will depend on implementation and coordination across the country.
There is also a risk that decentralisation could widen regional differences if wealthier areas are better equipped to attract investment and deliver new projects. The government will need to consider how funding and expertise can reach places with weaker economic capacity.
International credibility is therefore not simply a question of appearing business-friendly. It also depends on whether government policies produce measurable improvements in productivity, infrastructure and living standards.
The strongest test will be whether Britain becomes a more productive and attractive place to invest, not whether ministers or their opponents win a particular argument.
What About Ordinary Workers and Families?
The debate over economic policy can sound abstract, but its consequences are felt in household budgets, employment opportunities and the availability of public services.
If businesses invest and expand, they can create jobs, improve productivity and support higher wages. If investment weakens, workers may face fewer opportunities and slower wage growth.
At the same time, public services affect people’s ability to participate in the economy. Reliable transport helps workers reach employment, good healthcare can reduce time away from work, and affordable housing can make it easier for people to move towards better opportunities.
This is why the relationship between the state and the private sector should not be reduced to a simple choice between public spending and business growth. A successful economy needs both effective public institutions and productive private enterprise.
The disagreement concerns how the balance should be achieved and which policies are most likely to deliver lasting benefits.
Burnham’s supporters argue that the government must tackle the structural weaknesses that have held back parts of Britain for years. His critics counter that these ambitions will fail if the policies intended to fund them discourage investment or place excessive pressure on employers.
Both arguments ultimately need to be assessed against evidence. Employment, productivity, real wages, business investment, public debt and service performance will provide more useful indicators than dramatic comparisons with another country’s economic crisis.
A Political Test for Andy Burnham
Burnham’s government faces a demanding task: demonstrate that a more active state can improve living standards while maintaining confidence among businesses, investors and taxpayers.
The Venezuela comparison is politically explosive because it evokes the possibility of economic decline and institutional failure. But Britain is not Venezuela, and the two countries should not be treated as interchangeable examples.
That does not mean the concerns behind the criticism should be ignored. Governments can make costly mistakes, undermine confidence or create incentives that produce results opposite to those intended. Sound economic policy requires scrutiny, transparent evidence and a willingness to change course when a programme is not working.
Burnham will need to explain how his spending commitments will be funded, how his government intends to support private investment and what safeguards will apply when public money is used to rescue or take control of essential services.
He must also show that regional devolution will produce measurable benefits rather than simply moving responsibility from Westminster to local leaders without providing the necessary resources.
Ultimately, Britain’s economic future will depend less on the rhetoric of either side than on the results of decisions made over the coming years.
If the government can improve productivity, attract investment, strengthen public services and maintain sustainable public finances, its approach will have a stronger foundation. If growth remains weak, costs rise and promised improvements fail to materialise, its critics will have more evidence to support their concerns.
The warning behind the headline is therefore about choices rather than an established national collapse. Burnham has promised to change how Britain is governed and how its economy develops. The task now is to demonstrate that those changes can deliver prosperity without sacrificing financial stability or business confidence.
For voters, the crucial question is straightforward: will the government’s policies make life more affordable, create better opportunities and improve the services people depend on? Those outcomes—not the most dramatic political comparisons—will ultimately determine how its economic record is judged.