Uploaded March 2026 | Updated September 2026, 3 weeks ago
Fiscal rules, deficit targets, inflation targets, interest rate rules; every one of them was invented by neoliberal economists to constrain government and limit what democracy can achieve. In this video, I explain why these economic rules are holding back the UK economy and why it's time to forget them entirely.
Current economic policy starts with spending caps and debt-to-GDP targets before ever asking what society actually needs. This is backwards. Governments are uniquely capable of delivering universal healthcare, mass education, climate transition, and full employment — but austerity and rigid fiscal rules prevent that action. Rachel Reeves and the Labour government remain bound by rules designed to shrink the state, not serve the public.
I set out a different approach rooted in functional finance: start with societal goals, identify the real resources — labour, skills, infrastructure — needed to deliver them, and only then consider the finance required. Taxation exists to manage inflation by withdrawing excess spending power, not to "fund" government spending. Interest rates should steer financial flows towards productive investment in housing, small businesses, and public services — not fixate on an inflation target that monetary policy barely influences.
Forty-five years of market hegemony and neoliberalism have delivered poor outcomes — rising cost of living, crumbling public services, and growing national debt used to justify yet more austerity. The Bank of England needs reform. Fiscal policy and monetary policy must be used pragmatically, judged by outcomes, not by arbitrary rules. Economics is meant to serve society, and it's time UK politics reflected that.
If you believe democratic goals should come before deficit rules, like, subscribe, and join the conversation in the comments.
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life
Fiscal rules, deficit targets, inflation targets, interest rate rules; every one of them was invented by neoliberal economists to constrain government and limit what democracy can achieve. In this video, I explain why these economic rules are holding back the UK economy and why it's time to forget them entirely.
Current economic policy starts with spending caps and debt-to-GDP targets before ever asking what society actually needs. This is backwards. Governments are uniquely capable of delivering universal healthcare, mass education, climate transition, and full employment — but austerity and rigid fiscal rules prevent that action. Rachel Reeves and the Labour government remain bound by rules designed to shrink the state, not serve the public.
I set out a different approach rooted in functional finance: start with societal goals, identify the real resources — labour, skills, infrastructure — needed to deliver them, and only then consider the finance required. Taxation exists to manage inflation by withdrawing excess spending power, not to "fund" government spending. Interest rates should steer financial flows towards productive investment in housing, small businesses, and public services — not fixate on an inflation target that monetary policy barely influences.
Forty-five years of market hegemony and neoliberalism have delivered poor outcomes — rising cost of living, crumbling public services, and growing national debt used to justify yet more austerity. The Bank of England needs reform. Fiscal policy and monetary policy must be used pragmatically, judged by outcomes, not by arbitrary rules. Economics is meant to serve society, and it's time UK politics reflected that.
If you believe democratic goals should come before deficit rules, like, subscribe, and join the conversation in the comments.
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life
